Friday, March 29, 2019

DOWJONES - 29 March 2019


Fundamental Highlights

The Dow Index traded 0.36% higher to end at 25717 on Thursday. Economic data out of the US has proved to be mixed once again with a decline in jobless claims attesting to a strong labor market, the 4th quarter GDP rising 2.2% versus an estimate of 2.6% and pending home sales report fell to a negative reading. It would be interesting to see if today’s new home sales figure will follow this week’s weakness in US housing data as a downturn in the housing market, apart from the yield curve inversion, is another indicator of a looming recession. On the global trade front, US-China headlines successfully leveraged markets’ attention as reports on progress aided the lift in the Dow Index, however gains remain limited by fears of a weakening domestic economy. Today investors will continue to monitor US-China news whilst watching for the Chicago PMI reading and Core PCE data, the Fed’s main gauge for inflation.

Technical Analysis

The Dow Index managed to trade above the 50-period MA around 25700 before closing at 25717. Holding above the 20-period MA at 25650 level is required to sustain buying pressure and keep the index drifting higher to clear this week’s resistance around 25780. Overcoming this level combined with a break above the 60 level on the RSI would lead the index to target the 25820 and subsequent 25880 level. Failure to trade through the 25780 level will lead the index lower with a decline below 11570 required to indicate selling pressure.

Support: 25780 / 25820
Resistance: 25570 / 25480

Chart (H4)