Monday, March 18, 2019

DOWJONES - 18 March 2019


Fundamental Highlights

US indices posted firm gains on Friday as trade optimism was reignited on positive rhetoric from Chinese officials a day after a meeting between the US and China was reportedly delayed. Hopes for Sino-US trade progress have been easily swayed by news based speculation and leaves this market catalyst in a position to drive price action accordingly. Thus, it cannot be relied on for a sustained direction in US equities due to the ever changing perception of the two economic powerhouses’ relationship and leaves the FED’s dovish position on monetary policy the probable factor sustaining the bullish territory for US equities. On the US data front, results were mixed as Friday delivered a weak manufacturing index reading, a lower than expected industrial production figure and a rise in job openings. While markets await the FED’s policy meeting on Wednesday, price action should remain in positive territory and subject to news-driven momentum.

Technical Analysis

Last week, The Dow index managed to reverse a pullback that took it to a low around 25210 as the bulls regained control and drove the price higher. However a broader outlook suggests upside momentum is weakening and the DOW remains below the 26,000 psychological resistance as it rose 0.54% on Friday to end at 25848. The index managed to trade through the 100-period MA and is approaching the 26,000 resistance to bring back the 26240 level into view as it rises with the upper Bollinger band. Failure to hold above the support zone at 25760 will drive the index to test the 50-period MA around support at 25620.

Support: 25760 / 25620
Resistance: 25930/ 26080

Chart (H4)