Market News
- DJ closed lower after investors puzzled over conflicting reports about the progress of U.S.-China trade negotiations. Dow Jones News and Bloomberg had reported conflicting news on US-China trade talks. Sentiment around the talks had turned more positive recently as investors expect a deal to be reached between late March and April which helped stocks rally.
- Bloomberg reported that U.S. officials were worried China may be pushing back against U.S. demands in the countries’ ongoing trade talks. The report also said Chinese negotiators were worried they had not received assurances that tariffs imposed on Chinese goods would be lifted once a deal was struck. Dow Jones News reported that talks were in the final stages, noting China Vice Premier Liu He will travel to Washington in the next few weeks
- Fed policy announcement is at 2am Thursday morning. Market expectations for a rate hike are at zero, with most investors pricing in no change in policy. However, investors will look for clues on the Fed’s economic outlook.
Market View
- Shares in Asia slipped on Monday morning following conflicting reports on U.S.-China trade that surfaced overnight.
- DJ Index had a tremendous run since the turn of the year and we are only a few percentage points away from the all-time high. Market may have priced in positive conclusion and it is time to be cautious with divergence warnings in momentum.
Dow Jones Index
(CFD Symbol: US30)
Trend : Bullish
Recommendation : Long
Last : 25,855
Target price: 26,120
Protective stop: 25,650
Outlook
Price broke above the resistance zone at 25,926 to reach a high of 26,121. Price has dropped back below the resistance zone but managed to stay above the 20EMA line. MACD is still bullish despite a bearish divergence warning of a possible high. Stochastic is moving lower. Overall the bullish trend is intact as price managed to stay above the 20EMA and MACD is bullish. There may be one more attempt to the high.
Trading Idea
Look to enter near the 20EMA support at 25,800 for a possible rally to 26,120.
Hang Seng Index
(CFD Symbol: HK50)
Trend : Bullish
Recommendation : Long
Last : 29,376
Target price: 30,000
Protective stop: 29,035
Outlook
Price reached a high of 29,668 and has since declined lower to 29,300. This is above the previous high, which is a good sign. 20EMA is bullish and its gradient is steep, hinting of a strong bullish trend. Stochastic is in overbought extreme but this is normal in a strong trend. MACD is bullish.
Trading Idea
Keep long for 30,000 but keep a close watch on the 20EMA for possible reversal in trend direction. A break of 20EMA at 29,040 which is also an important support is bad for the bullish trend.
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend : Bullish
Recommendation : Long
Last : 7330
Target price: 7370 reached
Protective stop:
Outlook
Price made a new high last night at 7383, which exceeded our target. 20EMA is rising and the gradient of the slope is steep, hinting of a strong bullish trend. Trend is still strong and price is sitting on the trend line. However, both MACD and Stochastic are starting to give bearish divergence warnings hinting of a possible price high in formation There is a chance that this index can move higher but could be reaching a high soon.
Trading Idea
First sign of a possible reversal would be a break of the rising trend line with 20EMA as confirmation. Stay bullish as long as price is above the trendline
Nikkei 225 Index
(CFD Symbol: JP225)
Trend : Bullish
Recommendation : Buy
Last : 21,614
Target price: 21,800
Protective stop : 21,360
Outlook
Price broke above the triangle pattern and has been rising. The rise however is not as strong as we would have liked. The rally seems to lack strength and momentum. Both Stochastic and MACD are showing signs of a bearish divergence, hinting of a possible price high forming. The first sign of a reversal would be a break of the rising trendline.
Trading Idea
Keep long but bring stop higher to 21,480. Target remains at 21,800.
