- Stocks rose on Thursday as Apple and Micron surged to lead the tech sector higher. Dow Jones Index closed 216.84 points higher as a 3.7% gain in Apple offset a decline of 1.6% in J.P. Morgan Chase.
- Investor sentiment was boosted when Federal Reserve said it does not expect to raise rates in 2019. A lower interest is good for the US economy and good for the stock market.
- Fed trimmed US GDP forecast from 2.3% to 2.1% on Wednesday which raised concerns over a possible slowdown in the US economy. Investors are also grappling with mixed news on the trade front. US-China trade talks have progressed without progress on a trade deal.
- Stocks in Asia were mixed on Friday morning despite an overnight surge on Wall Street. Hang Seng Index is up by 130 points but Nikkei 225 Index is down 40 points.
- Tech shares (Apple) have led the gains in equities, although financials (JP Morgan) have continued to struggle. A pause in interest rate is good for the tech sector but is likely to weigh on banks shares. We recommend long USTec and short the US30. This hedged approach lowers risk and but can to take advantage of market directional movement.
Dow Jones Index
(CFD Symbol: US30)
Trend : Bullish
Recommendation : Long
Last : 25,950
Target price: 26,170
Protective stop: 25,550
Price recovered from the 25,586 low to reach a high of 26,021 last night. The recovery from the low was sharp, hinting of a strong price trend. MACD is still bullish despite a bearish divergence warning of a possible high. Stochastic is moving up from oversold extreme. Overall the bullish trend is intact as price managed to stay above the 20EMA and MACD is bullish.
Look to enter near the 20EMA support at 25,800 for a possible rally to 26,120.
Hang Seng Index
(CFD Symbol: HK50)
Last : 28,963
Price formed a bearish Engulfing pattern on the 4-hourly chart and this is a bearish pattern, hinting that the decline is not over yet. There should be another price decline to support zone below. Both MACD and Stochastic are still moving lower. MACD is bullish.
We remain bullish and would recommend buying dip at 28,600. Short term traders can sell current market price for a movement towards support zone below.
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend : Bullish
Last : 7484
Target price : 7565
Protective stop: 7380
Price made a new high last night at 7505, which was the Fibonacci 161.8% target. 20EMA is rising and the gradient of the slope is steep, hinting of a strong bullish trend. Both MACD and Stochastic are starting to give bearish divergence warnings again hinting of a possible price high in formation As the trend is still strong, we will override the divergence warnings one more time. The next target is at 7640. Our calculation is for 7565.
Stay bullish as long as price is 7380. Look to buy dip at 7440 for 7565.
Australian 200 Index
(CFD Symbol: AUS200)
Trend : Bullish
Last : 6243
Protective stop :
Price is moving within a Rectangle sideway pattern. It tested the upper range but did not manage to break above this morning. Both Stochastic and MACD are rising although MACD has yet to turn bullish. A breakout to the upside could bring price to the previous high at 6338.
Wait for the upside breakout at 6280