Market News
- U.S. stocks bounced back on Tuesday from a slump a day earlier led by tech stocks after the U.S. eased some of the restrictions on China’s Huawei for 90 days, allowing the tech giant to purchase American-made goods in order to maintain existing network and provides software updates to existing Huawei handsets until 19 Aug 2019.
- Dow Jones index gained 197 points at the close of trading on Tuesday. S&P 500 was up 24 points while Nasdaq Composite index was up more than 1%, gaining 83 points at the close.
- U.S. Commerce Department on Monday granted a 90-day license for U.S. mobile phone companies and internet broadband providers to work with Huawei to keep existing networks online and protect users from security risks.
Market Views
- Asian stocks were on shaky ground on Wednesday, as earlier relief over Washington’s temporary relaxation of curbs against China’s Huawei Technologies failed to offset deeper worries about trade frictions between the world’s two largest economies.
- US sought to minimize disruption for Huawei’s customers around the world but investors are still worried that the ongoing U.S. – Sino trade war was intensifying. Chinese President Xi Jinping signalled there would be no end to the trade war in the near future. China will start to impose tariffs on 1 June on US$60B of imports and US is likely to impose tariffs on another new batch of US$300B of imports, intensifying the trade war between the world’s two largest economies.
Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation :
Last : 25,875
Target price:
Protective stop:
Outlook
Price has recovered from a low of 25,229 to 26,000 but the rally could come into strong resistance around 26,000 with previous price highs and 20EMA providing resistance. Stochastic has been climbing higher but both MACD and 20EMA are bearish. Price will need to cross over 26,000 to be bullish again. While we remain long term bullish, it is not clear if the corrective decline is over
Trading Idea
Wait for better trade idea.
Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation :
Last : 27,886
Target price:
Protective stop:
Outlook
This index is likely to test the Fibonacci 50% correction point of 27,595 again. Yesterday it was unable to move higher after testing the Fibonacci support. A move below the Fibonacci 50% point would target the 62% point at 26,944. While Stochastic is into oversold extreme, MACD is still bearish but could be turning around. We will put yesterday’s trading idea of buying at Fibonacci 50% point on hold and watch the reaction for clues.
Trading Idea
Wait for clearer signal.
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend :
Recommendation :
Last : 7427
Target price
Protective stop:
Outlook
Yesterday was an Inside Day chart pattern. It is a sign of indecision and consolidation. As MACD is bearish, we are expecting price to test the support zone of 7202-7247 again with 20EMA also bearish. 20EMA is also acting as a resistance at 7556. We would prefer to wait for a safe location to get into a bullish position.
Trading Idea
Wait for dip to 7202-7247 to buy for a rally to 7520 with stop at 7165.
Australian 200 Index
(CFD Symbol: AUS200)
Trend :
Recommendation :
Last : 6554
Target price:
Protective stop :
Outlook
Despite the trade talk worries, this index has made another new high today for a third consecutive day. The target for this breakout is at 6660, based on Ichimoku V structure price forecasting. Both Stochastic and MACD are rising. MACD is bullish and 20EMA is also bullish. Momentum and trend are indicating this index can move higher.
Trading Idea
Buy at 6490 for 6660 with stop below 6410.
