Tuesday, May 21, 2019

DOWJONES - 21 May 2019


Fundamental Highlights

US Indices ended lower on Monday as US tech companies act in accordance with the US administration’s ban on Chinese telecom Huawei by cutting business ties. Global stocks across the board dropped lower as the recent developments raises concerns over the prospect of a prolonged trade dispute weighing on the global economy as well as the negative impact on corporate profits in the US. Today, the US publishes a report on April existing home sales which is estimated to rise, however sentiment should remain low throughout the day as there is little reason for optimism on the global trade front. Traders should continue to monitor US-Chine headlines as recent developments may harden China’s stance on holding off trade negotiations and trigger a retaliation that would prompt further declines in tech stocks.

Technical Analysis

The Dow Jones ended 0.33% lower however ended off its session’s low at 25679. The price traded below 25720 level to reach a low of 25550 while the RSI reading broke below the rising trend line support. It is worthy to note that the 20-day MA is looking to cross below the longer 50-day MA signaling a shift to the downside in the overall trend. Look for a move above 25850 to signal the presence of buying pressure and a break through resistance at 25950 to target resistance at 26080. Failure to find support at 25580 would impair the short-term uptrend on the Dow and signal further declines towards support at 25450.

Support: 25580/ 25450
Resistance: 25850/ 25950

Chart (H4)