Market News
- Both the S&P 500 and Nasdaq Composite index closed at record highs on Friday as better-than-expected economic data offset a mixed batch of corporate earnings. Dow Jones index was up 81 points at the close of trading.
- U.S. Commerce Department said Q1 GDP rose 3.2%, topping market consensus of 2.5%. However it was an increase in trade and inventories that drove the better-than-expected number and this outperformance may not be repeated in the next quarter.
- With Kudlow and Trump putting pressure on Fed for a cut rate and expectation of a rate cut by Dec 2019 having risen to 65.4%, based on trading in the Fed Fund futures market, hope of a rate cut could keep the stock market on a longer uptrend.
Market Views
- Asian stock markets edged higher on Monday boosted by the S&P 500 index’s gain to a new record high, but gains were capped by caution over less upbeat aspects in the GDP report which pointed to some weakening ahead as well as a weak Chinese stock market.
- Mainland Chinese stock market continues to weigh on the Asian stock markets as historical high valuation is leading investors to take their profit. Shanghai Composite index saw 5.5% loss in the last week. Japanese market is on holiday for a whole week.
Dow Jones Index
(CFD Symbol: US30)
Trend : Bullish
Recommendation :
Last : 26,549
Target price:
Protective stop:
Outlook
Price dropped to a low of 26,305 on Thursday and Friday’s rally could be part of a bigger correction. This came after price has reached the Fibonacci 161.8% projection target of 26,701 on Wednesday. We are expecting another decline below 26,305 to complete the correction in the next few of days. 20EMA is flat at the moment. Stochastic is rising but MACD is bearish.
Trading Idea
Wait for the correction towards 26,200 to enter into a long position
Hang Seng Index
(CFD Symbol: HK50)
Trend : Bullish
Recommendation :
Last : 29,878
Target price: 30,650
Protective stop:
Outlook
The index had declined below the range on Thursday to a low of 29,570 but had bounced back into the range again. Stochastic is rising but MACD is bearish at the moment. We think 29,570 may be the low and this index could be on the way up to test the previous high of 30,349 again. Longer term, our target remains at 30,650.
Trading Idea
Look to buy around 29,780 for a test of 30,349.
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend : Bullish
Recommendation :
Last : 7828
Target price
Protective stop:
Outlook
This index declined low to 7738, which was above the support level at 7729. This could be a sign that the current rally may not be over as yet. MACD is bullish and rising but had a previous divergence warning. Stochastic is rising. The Fibonacci 200% projection target at 7930 is the next target.
Trading Idea
Buy dip to 7781 for 7930 with stop below 7720.
S&P 500 Index
(CFD Symbol: US500)
Trend : Bullish
Recommendation :
Last : 2940
Target price: 2946
Protective stop :
Outlook
Price made a new historical high of 2940 on Friday night. MACD is bullish and rising. Stochastic is rising and is near to the overbought extreme. 20EMA is bullish and rising as well. The strong trend is likely to push this index towards the Fibonacci 161.8% target at 2946.
Trading Idea
Buy dip to 2923 for a test of 2946 with stop below 2910.
