Thursday, May 23, 2019

DOWJONES - 23 May 2019


Fundamental Highlights

The Dow Jones Index’s brief recovery on Tuesday was short-lasted as it drops 0.39% on Wednesday. The Fed Meeting minutes revealed that the central bank is comfortable with its rates and see no incentive to modify their monetary policy citing moderate economic growth and soft inflation pressures. Investors were disappointed as they deem a rate cut fit given the signs of economic weakness and the negative impacts of the protracted US-China trade dispute which has escalated over recent weeks. Today the US publishes New Home Sales data which is forecasted to drop while a slew of Fed members are scheduled to speak. Markets will look for further developments on the US-China trade front to determine direction as it has proved to be a tiresome headwind on US equities.

Technical Analysis

The Dow Jones struggles for direction as it exhibited range bound price action on Thursday before ending lower at 25776. A sustained move below the 20-period MA at 25780 would signal selling pressure while a break below 25670 would lead the Dow to retest its most recent low around 25550 separating the Index from further declines. It is worthy to note that the shorter 20-day MA crosses below the 50-day MA for the first time since the Dow’s bull run in December and may indicate a shift in the overall trend. The short-term outlook remains neutral to bearish unless we see a break through the resistance at 25950 which would clear the path above the 26000 level and target resistance at 26080.

Support: 25550/ 25440
Resistance: 25950/ 26080

Chart (H4)