Market News
- Wall Street was closed for New Year’s Day holiday last night, but the major indexes edged higher on Tuesday on a renewed rally fueled by trade optimism, capping off a decade of handsome returns in which the benchmark S&P 500 rose nearly 190%.
- Trump said on Tuesday via Twitter that the Phase 1 U.S.-China trade deal would be signed on Jan. 15 at the White House, bolstering widespread expectations of a finalized preliminary agreement in early 2020.
- The Markit/Caixin Purchasing Managers’ Index (PMI) for manufacturing in the month of December came in 51.5, versus 51.8 in November. Data this morning showed that the Chinese economy was stabilizing instead of a slowdown as feared.
Market Views
- Asian shares were mixed at the first day of 2020, after global stocks ended the previous one at record highs, and buoyed by Chinese markets after Beijing eased monetary policy to support slowing growth. Hang Seng index surged 271 points while Nikkei 225 index slipped 181 points.
- China’s central bank on Wednesday announced that it would cut the amount of cash that banks must hold as reserves, releasing around 800 billion Yuan in funds to shore up the slowing economy effective from Jan. 6.
Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation :
Last : 28,612
Target price:
Protective stop:
Outlook
The index recorded a new all-time high at 28,732 last Friday, but ended the day with a gravestone Doji candlestick pattern. Price is now supported by the rising 20EMA. A break of the 20EMA, coupled with the Doji warning, can send the index lower to 28,000. The index has to break above the high at 28,732 to continue rallying towards the next resistance level at 28,866. MACD is bullish at the moment but there is divergence warning which is raising concern. Stochastic is at the overbought extreme.
Trading Idea
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Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation :
Last : 28,517
Target price:
Protective stop:
Outlook
This index is now testing its Fibonacci 127% resistance level at 28,550, which is also the rising channel resistance level. Price will need to break above this resistance level to move to its previous high’s resistance at 29,070. A break below the gap support at 27,940 is likely to bring the index lower to 27,500. MACD is still bullish at the moment and Stochastic is moving higher.
Trading Idea
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Nasdaq 100 Index
(CFD Symbol: USTec)
Trend :
Recommendation :
Last : 8767
Target price :
Protective stop:
Outlook
The index had recorded a new all-time high of 8818 last Friday. It is now moving within a rising channel, and the rising 20EMA is acting as a layer of support. Price will need to break above 8818 for further rally towards 8864. A move below 8668 would likely see the index dips towards the lower channel support at 8456. Stochastic is at the overbought extreme. MACD is still bullish at the moment but a bearish crossover could be likely in the coming session.
Trading Idea
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S&P 500 Index
(CFD Symbol: US500)
Trend :
Recommendation :
Last : 3238
Target price:
Protective stop :
Outlook
This index created a new all-time high at 3251 last Friday. It is breaking out from the Flag pattern today and we would like to see a closing above 3234, which is Tuesday’s high, to confirm the breakout. The next resistance comes in at 3315. The rising 20EMA is acting as support at 3197. MACD is still bullish at the moment and Stochastic is also moving higher at the overbought region.
Trading Idea
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