Market News
- The Dow closed 166.50 points higher as investors awaited more news on a potential trade deal between China and the U.S. Lower unemployment claims also helped to lift market sentiment.
- Xinhua reported this morning that Chinese President Xi Jinping had said progress was being made and called for an early conclusion of negotiations. Liu He said new consensus reached in text on trade deal.
- US jobless claims dropped by 10k to 202k in the prior week, which was a 49-year low, pointing to sustained labour market strength and lifting sentiment on the stock market. Investors will get a clearer picture of the U.S. labour market tonight, when the non-farm payrolls report will be announced at 8.30pm.
Market View
- Asian share markets consolidated weekly gains on Friday as Sino-U.S. talks dragged on with hopes and optimism but no concrete conclusions. Caution ahead of U.S. payrolls and a holiday in China and Hong Kong dampened volatility.
- Improvement in U.S.-China trade talks has boosted stocks to start off 2019. The S&P 500 is up more than 14% year to date, with technology stocks leading the way. A reversal in the Federal Reserve’s policy stance has also lifted equity prices. While the sentiment is good, the index is near a 6-month high and venerable to a correction.
Dow Jones Index
(CFD Symbol: US30)
Trend : Bullish
Recommendation :
Last : 26,416
Target price: 26,970
Protective stop: 26,200
Outlook
Price reached a low of 26,189 as it was supported by the rising 20EMA. The index could be heading towards the historical high of 26,970. Stochastic is neutral and rising. MACD is bullish and rising. Both momentum oscillators are supportive of a price advance at this moment. There are no divergence warnings as yet.
Trading Idea
Keep long position for 26,970 with stop below 26,200.
Hang Seng Index
(CFD Symbol: HK50)
Trend : Bullish
Recommendation :
Last : 30,127
Target price: 30,650
Protective stop: 29,668
Outlook
Price reached a high of 30,145 yesterday and could be heading higher again. Stochastic is into overbought extreme but MACD is still bullish. MACD’s strength is losing momentum and there could be divergence warning forming as price proceeds higher.
Trading Idea
Keep long for 30,650 with protective stop below 29,668.
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend : Bullish
Recommendation :
Last : 7545
Target price:
Protective stop:
Outlook
Price made a new high 2 nights ago at 7589. The decline off the new high was supported by the 20EMA at 7506. As long as the index stays above 7490, it should continue to test higher. Stochastic is turning higher again. MACD is moving higher but there was a divergence from MACD before. Watch out for MACD divergence warning. We could be approaching a market top soon.
Trading Idea
Keep long but be cautious of a reversal. Watch support at 7490.
Nikkei 225 Index
(CFD Symbol: JP225)
Trend : Bullish
Recommendation :
Last : 21,788
Target price: 21,940 reached
Protective stop :
Outlook
Price made a Double Top at 21,842 over the past 3 days. It is important to see if price can move above 21,842. If price is able to move above, it should be heading to the Fibonacci 161.8% point at 21,940. Inability to surpass 21,842 could result in a Double Top chart pattern which is a bearish reversal pattern calling for 21,450.
Trading Idea
Keep long at 21,940 but bring stop higher to 21,600.
