Tuesday, October 16, 2018

DOWJONES - 17 October 2018


Fundamental Highlights

The market rallied Tuesday, and the Dow moved sharply higher over the course of the trading day surging 548 points or 2.2% to 25,799. The rally on Wall Street partly reflected a positive reaction to upbeat earnings news from several big-name companies, with financial giants Goldman Sachs (GS) and Morgan Stanley (MS) reporting third quarter results that beat estimates on both the top and bottom lines and Netflix (NFLX) smashing earnings' estimates after the US market close. Buying interest was also generated following the release of positive economic data, including a report from the Federal Reserve showing industrial production increased in line with economists' estimates in September. Looking ahead, earnings news is likely to remain in focus today, with additional companies releasing their Q3 results.

Technical Analysis

The Dow closed with a solid gain of 2.2%. The index has never gained more in one day since Mar 26, when it was up 2.7%. It also looks good technically. The index is trend wise positive in the short term, has marginally broken up through the resistance at 25640 and a further increase is indicated on the short term. However, the index is also approaching the 200-period SMA on the 1H chart. This indicator will most probably attract sellers and the chance for further decline in the medium term.

Support: 25100 25000
Resistance: 25800 26250

Chart (H1)