Monday, June 24, 2019

DOWJONES - 24 June 2019


Fundamental Highlights

US Indices ended modestly lower on Friday after being in bull mode for most of the week. The market is lacking the impetus to advance further as the US administration blacklisted additional Chinese companies just as we approach the widely anticipated G-20 summit meeting while geopolitical tensions between the US and Iran escalate and adds another element of uncertainty. Though last week’s rally was fueled by the prospects of easier monetary policy from the FED, the excitement may wear out as the fundamental focus shifts to US-China trade relations which haven’t seen any positive developments so far. In terms of economic data, US existing home sales impressed while manufacturing PMI neared towards contraction territory as it fell to 50.1 and provided further evidence on the economy’s weakening performance. Today, there are no major economic releases out of the US, and while the Fed’s outlook on the possibility of a rate cut buoys market sentiment, US-China trade concerns alongside Middle East tensions should leave investors in a cautious stance as they await to see if the two nations should make any headway.

Technical Analysis

It was a relatively quiet session on Friday following a week of strong gains as the Dow traded within a range before ending 34 points lower at 26719. The index recorded an intraday high around 26910 just before the RSI reading exited the overbought territory. The RSI reading is exhibiting a falling trend line which, if broken, would indicate a potential bullish continuation towards the record high of 26940 should price sustain above the 26800 level. Failure to edge above the 26800 level should maintain the Dow’s range-bound price action with immediate support provided by the 20-period MA at 26660 as markets await further trade developments.

Support: 26660/ 26580
Resistance: 26800/26940

Chart (H4)