Wednesday, May 22, 2019

DOWJONES - 22 May 2019


Fundamental Highlights

Following the previous sessions declines, US equities ended higher on Tuesday as the US temporarily eases sanctions against Chinese telecom Huawei. The move relieved tech stocks and boosted sentiment throughout the day however fails to take away from tensions between the US and China and should leave bulls cautious about taking markets any higher. On economic data, Existing home sales in the US declined in April and today’s highlight resides in the FOMC meeting minutes as traders will look to economic projections and the outlook on future monetary policy against a backdrop of benign inflation and a strengthening economy evident in the better than expected 1stQ GDP growth of 3.2%. Moreover, US-China headlines should continue to be monitored as scheduled trade negotiations remain on hold.

Technical Analysis

The Dow Jones traded 0.77% higher to end at 25877 on Tuesday. Given the sequence of higher lows on the Dow, it appears the Index is set to continue higher. However the resistance at 25950 has limited its reach from the 26,000 psychological level. Look for a sustained move above 25750 to signal buying pressure and a break through 25950 to clear the way towards higher resistance at 26080. Alternately, a sustained move below the 50-period MA around 25670 would signal selling pressure while a push below the most recent low at 25550 would revive the bearish view.

Support: 25670/ 25550
Resistance: 25950/ 26080

Chart (H4)