CFD Indices 15 May 2019

Market News

  • U.S. stocks closed higher on Tuesday, regaining some of the sharp losses from Monday, as investors weighed the impact of the escalating trade war between the U.S. and China. Dow Jones was up 207 points, S&P added 22 points while the Nasdaq Composite gained 87 points.
  • On Monday, the Dow and S&P 500 fell 617 points and 69 points respectively, their worst performances since early January. The Nasdaq Composite dropped 270 points in its biggest one-day loss of 2019. These losses came on the back of a trade tariffs war between the world two largest economies that could impact global economic growth besides the two largest economies
  • China Industrial production came out at 5.4% against market expectation of 6.5%. Retail Sales number was also lower at 7.2% against expectation of 8.6%.

Market Views

  • Asian stocks struggled near a 3 and a half month low on Wednesday on lingering concerns over the economic impact on the global economy as U.S.-China trade war intensified, although an overnight bounce on Wall Street due to a softening in tariffs rhetoric helped limit the losses.
  • In a note to clients on Monday, Citibank said its China economists are “cautiously optimistic that a trade deal can eventually be signed.” But it added that the “window to avoid further escalations in US/China tensions is closing fast.”

Dow Jones Index

(CFD Symbol: US30)

Trend :
Recommendation :
Last : 25,626
Target price:
Protective stop:

Outlook

On a longer term outlook, we remain bullish as current price decline could be a correction of 2019’s rally. First support at 25,229 was reached and the index has bounced higher. We will need to see if it can continue higher. This index is still above Fibonacci 38% correction of this year’s rally which is at 24,707. Stochastic and MACD are both trending lower but could be about to turn around. MACD is still bearish. Wait for confirmation of a reversal.

Trading Idea

Wait for a price dip to 24,707 to get into a long position for the next rally.


Hang Seng Index

(CFD Symbol: HK50)

Trend :
Recommendation :
Last : 28,401
Target price:
Protective stop:

Outlook

The correction has moved below the Fibonacci 38% correction of this year’s rally. It could be heading towards the Fibonacci 50% point. Stochastic is still moving lower and MACD is still bearish and moving lower. We think the decline may not be completed as yet as the rally has yet to fully cover a reversal gap. There could be potential for further decline towards the Fibonacci 50% correction point of 27,595.

Trading Idea

Wait for price to come into the support zone from 27,774 to 27,595 to get into a long position for the next rally.


Nasdaq 100 Index

(CFD Symbol: USTec)

Trend :
Recommendation :
Last : 7435
Target price
Protective stop:

Outlook

Price has managed to bounce off near a support area. It may be too early to conclude at the moment. We need to see if this support zone at 7201 to 7243 can hold. As Stochastic is still moving lower and MACD is not turning around as yet; there is a possibility of this index moving lower to 7202.

Trading Idea

Wait for price decline to support zone at 7202 to get into a long position.


S&P 500 Index

(CFD Symbol: US500)

Trend :
Recommendation :
Last : 2844
Target price:
Protective stop :

Outlook

Stochastic is still heading lower but could be about to turn around. MACD is bullish and may be about to turn around as well. There is a chance, we may see a reversal before the support zone but it is better to wait for further confirmation. We believe this decline is corrective and the overall trend is still bullish.

Trading Idea

Wait for a price decline towards Fibonacci 38% support point 2712 to get into a long position for the next rally.


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