CFD Indices 21 March 2019

Market News

  • DJ closed lower after Federal Reserve’s latest monetary policy announcement dragged Treasury yields lower, pushing bank shares down. Initial rally on FOMC’s announcement was dragged down by bank stocks, which fell along with Treasury yields.
  • Federal Reserve forecasts no rate hike in 2019. The central bank also indicated it intends to end the reduction of its massive balance sheet by Sept 2019. Selling of bonds to the market is akin to draining liquidity from the market. Fed also trimmed its economic forecast for 2019.
  • Equities were also under pressure after US President Trump said US tariffs on Chinese goods could stay on for a long period of time besides saying a deal was “coming along nicely”

Market View

  • Shares in Asia rose on Thursday morning after Federal Reserve took a more accommodating stance at its policy meeting but lingering concerns about China-US trade talks returned to haunt the market.
  • “We’re not talking about removing [tariffs], we’re talking about leaving them for a substantial period of time because we have to make sure that if we do the deal with China that China lives by the deal,” Trump told reporters. China will find it hard to agree to a trade deal. Be prepared for more uncertainties.

Dow Jones Index

(CFD Symbol: US30)

Trend : Bearish
Recommendation : Short
Last : 25,727
Target price: 25,470
Protective stop: 25,950

Outlook

Price was capped by the 20EMA and this could be a short term bearish sign with the index likely to test the base of the Rising Wedge chart pattern at 25,470. Stochastic is near to oversold zone and the downside could be limited to 25,470. MACD could be about to turn bearish but given its momentum is not that strong, we do not think the down move still last long. We view this decline as a correction.

Trading Idea

Short term short sell at current market level for a price move to 25,470.


Hang Seng Index

(CFD Symbol: HK50)

Trend : Bullish
Recommendation : Long
Last : 29,428
Target price: 30,000
Protective stop: 29,035

Outlook

Price pullback to a low of 29,191 which was above the previous high and also above the 20EMA. The 20EMA‘s gradient is steep and is hinting of a strong bullish trend. Stochastic has a prolong stay in the overbought extreme and we view this as a sign of a strong trend. MACD is bullish. We remain bullish on this index.

Trading Idea

Short term, price is likely to be capped by gap resistance at 29,521 and supported at 29,150. We recommend trading this 400 points range.


Nasdaq 100 Index

(CFD Symbol: USTec)

Trend : Bullish
Recommendation : Long
Last : 7390
Target price: 7500
Protective stop: 7299

Outlook

Price made a new high last night at 7415. 20EMA is rising and the gradient of the slope is steep, hinting of a strong bullish trend. Price broke the rising trendline only for a brief moment and has managed to stay above this trendline. However, both MACD and Stochastic are starting to give bearish divergence warnings hinting of a possible price high in formation In view of the strong trend, we will override the divergence warnings. The next target could be the Fibonacci 161.8% target at 7500.

Trading Idea

Stay long for 7500 target. A good entry could be at 7360 and stop below 7299.


Nikkei 225 Index

(CFD Symbol: JP225)

Trend :
Recommendation :
Last : 21,481
Target price:
Protective stop :

Outlook

Price broke below the rising trendline and has stay below the trendline as well as the 20EMA line. Both Stochastic and MACD are showing signs of a bearish divergence, hinting of a possible price high forming. There is a possibility of price going lower to 21,200 and we are waiting for confirmation

Trading Idea

Short term keep short with stop above 21,600 for a test of 21300, which is the Fibonacci 38% correction point.

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