Tuesday, March 26, 2019

DOWJONES - 26 March 2019


Fundamental Highlights

Theme of risk aversion carried itself from Friday’s sell off into Monday as the Dow Index extends losses before ending slightly higher by 14 points. Fears of a looming recession signaled by the treasury yield curve inversion continue to linger and put a damper on demand for US equities. Market participants will continue to monitor US-China trade headlines and look to today’s US housing figures and consumer confidence report to influence sentiment and near-term direction amidst concerns of a weakening domestic economy.

Technical Analysis

The Dow index formed a new low before recovering losses to end at 25,516 on Monday. The price rebounded off the support of 25350 and remained capped by the resistance at 25590. The RSI reading corresponded with price action as it formed a new low and headed towards trend line resistance. While the short-term down trend remains intact so long as resistance at 26014 holds, breaking through the RSI trend line would lead price to extend the rebound and push to a high past the resistance around the 20-period MA of 25660 to test the 50-period MA at 25760. Failure to surpass the 25660 level would reverse the index to the downside with a trade through support of 26350 needed to signal a bearish continuation and bring into view the 25270 level and key support at 25215.

Support: 25350 / 25270
Resistance: 25660/ 25760

Chart (H4)