Market News
- Investors cheered renewed optimism on US-China trade front, sending the Dow Jones Index up 139 points on Friday. Speculation that Fed will sound decidedly dovish at its FOMC meeting in the middle of the week is adding to the bullish stock market sentiment.
- Chinese Vice-Premier Liu He spoke via telephone with US’s Mnuchin and Lighthizer and according to South China Morning Post, the 2 sides have made further progress on the text of trade agreement between the 2 countries.
- Treasury yield on benchmark 10-year US Treasury dropped to 2.587 and 30-year bond to 3.01. Bond and Treasury were in demand globally on speculation Fed would sound decidedly dovish at its policy meeting in the middle of the week. More details about Fed’s culling of its holding of 3.8 trillion of bonds are also eagerly awaited.
Market Views
- Asian stock markets rose while investors await US-China trade talk developments. Any sign of a meeting of the 2 presidents is likely to help with a positive mood. Hang Seng is up 290 points and trying to stay above its previous 2019 high.
- Positive mood is likely to prevail into the middle of the week on hopes of FOMC’s dovish note. While the mood is positive, momentum of most indices is not that positive. The rise in most indices is not accompanied by a strong upside momentum.
Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation :
Last : 25,885
Target price:
Protective stop:
Outlook
Price tested the resistance zone at 25,926 and managed to stay above the resistance zone only for a short period of time. Price needs to move above this resistance zone to be bullish. Both MACD and Stochastic have shown bearish divergence warnings, hinting of a possible top.
Trading Idea
We prefer to stay aside for today and wait for a break above the resistance zone to be bullish.
Hang Seng Index
(CFD Symbol: HK50)
Trend : Bullish
Recommendation : Long
Last : 29,318
Target price: 30,100
Protective stop: 29,000
Outlook
Price broke above a sideway rectangle pattern to reach a high of 29,411 this morning. 20EMA is pointing upward and showing a strong bullish trend. However both MACD and Stochastic are not strong and have yet to make a higher high with higher price peaks. While the trend is bullish, we are also cautious of a weak momentum hinting of a possible price high in the making
Trading Idea
Go long for 30,000 but keep a close watch on the 20EMA for possible turn in trend direction.
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend : Bullish
Recommendation : Long
Last : 7309
Target price:7360
Protective stop: 7260
Outlook
Price made a new high on Friday and has managed to stay above the previous high of 7285. 20EMA is rising and the gradient of the slope is steep, hinting of a strong bullish trend. However, both MACD and Stochastic are not that strong and has not made higher high as compared to price peak. Price could be forming a Rising Wedge chart pattern as well which is a bearish reversal hint.
Trading Idea
Go long but keep a tight stop. First sign of a reversal of the uptrend would be the previous high at 7285.
S&P 500 Index
(CFD Symbol: US500)
Trend : Bullish
Recommendation : Long
Last : 2826
Target price: 2840
Protective stop : 2815
Outlook
Price is rising and is in a strong trend as indicated by the 20EMA line which is rising and with a steep gradient. However it looks like price is rising in a Rising Wedge chart pattern, which is a reversal chart pattern. Both Stochastic and MACD, while bullish are showing signs of a bearish divergence, hinting of a possible price high forming.
Trading Idea
Go long for 2840 with a stop just below 2815 to take advantage of the rising trend but keep a close stop to protect against trend reversal.
