CFD Indices – Can US Indices Surpass Its 50EMA?

Market News

  • Dow Jones Index jumped more than 200 points, closing 240 points higher to 26,202, as strong quarterly results from retailers such as Target and Lowe’s lifted investors sentiment. Nasdaq Composite index gained 71 points while S&P 500 index rose 23 points.
  • Markets had a relatively modest reaction overnight after the Fed released minutes of its last meeting in July, saying that “we shouldn’t view the 25 basis points cut in July as an indication that there is a pre-set course for future cuts as that was just a mid-cycle adjustment”.
  • Hopes for U.S. fiscal stimulus also got a knock when Trump reversed course and said he was not looking at cutting payroll taxes but this did not derail the U.S. market advance.

Market Views

  • Stocks in Asia edged lower on Thursday morning despite Wall Street getting a boost from strong retail results and bonds yields retreated as U.S. central bankers tempered market expectations of an aggressive rate cut. Hang Seng index slipped 230 points and Nikkei 225 index fell 6 points.
  • The U.S.-China trade war remained on investors’ radars after Trump made new comments about the trading relationship with the European Union. He said dealing with the European Union is very difficult.

Dow Jones Index
(CFD Symbol: US30)

Trend :
Recommendation :
Last : 26,230
Target price:
Protective stop:

Outlook

This index’s rebound for the past three consecutive days came to an end after hitting the 20EMA resistance point. Last night’s rally was capped by the 20EMA as well. The resistance at the mid-June low resistance level also provided another layer of resistance. If the index cannot surpass the mid-June resistance, it is heading towards its previous low point at 24,603 again, while a break above the resistance looks less likely at the moment as MACD is bearish with both of MACD’s lines below the zero line. Stochastic is rising.

Trading Idea

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Hang Seng Index
(CFD Symbol: HK50)

Trend :
Recommendation :
Last : 26,159
Target price:
Protective stop:

Outlook

Price reached a low at 24,941 and rebounded, forming a Harami candlestick pattern last Thursday. Price has been testing the 20EMA resistance point for four consecutive days and is consolidating at the moment. We expect the 20EMA to provide resistance and to halt the rebound for a test lower to 24,941 again, while an upside break of 20EMA will target the gap tip at 27,470. Stochastic is turning up but MACD is still bearish

Trading Idea

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Nasdaq 100 Index
(CFD Symbol: USTec)

Trend :
Recommendation :
Last : 7730
Target price :
Protective stop:

Outlook

Price broke above the Triangle pattern yesterday and is now testing its previous high of 7780. If price cannot break above 7780, we could see price testing the downtrend line again at 7510 or dipping to 7195. Above 7780, price is likely to test is previous high of 8035 again. Stochastic is turning up again but MACD is still bearish with both of MACD’s lines below the zero line.

Trading Idea

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Nikkei 225 Index
(CFD Symbol: JP225)

Trend :
Recommendation :
Last : 20,621
Target price:
Protective stop :

Outlook

The rebound could come to an end after being capped at the 20EMA resistance point. With the declining 20EMA, price could continue falling to 20,300 if it is unable to break above the 20EMA. Stochastic is rising but is near to the overbought region. MACD is still bearish and the fast line could be turning down again soon.

Trading Idea

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