CFD Indices – Could Fear Of Coronavirus Pandemic Derail Equity Market?

Market News

  • Fears of contagion, particularly as millions travel for Lunar New Year festivities, knocked stocks from record levels on Tuesday. Dow Jones slid 152 points, Nasdaq Composite declined 18 points and S&P 500 lost 8 points.
  • The virus, which causes a type of pneumonia, has spread to cities including Beijing and Shanghai as the number of patients in China more than tripled. More cases were also reported outside China, including U.S. This will be the new threats and concerns that investors may look out for the coming weeks and months.
  • News of the coronavirus evoked memories of the 2002/03 outbreak of Severe Acute Respiratory Syndrome (SARS), which killed nearly 800 people globally and led to a sharp downturn in tourism in Asia.

Market Views

  • Asian share markets steadied on Wednesday morning as investors took stock of the spread of a new strain of coronavirus from China and weighed the possible consequences of a global pandemic. Hang Seng index recovered 259 points and Nikkei 225 index rose 120 points.
  • Oil prices also settled back as traders figured a well-supplied global market would be able to absorb disruptions that have cut Libya’s crude production to a trickle.

Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation :
Last : 29,329
Target price:
Protective stop:

Outlook
This index created a new intraday record high at 29,402 last Friday, but ended the day with a Shooting Star candlestick pattern. A Doji candlestick pattern was followed-through and last night we saw a price decline. Price could be moving lower to test its 20EMA at 28,860. Price will have to break above 29,402 for further rally towards 29,650. Stochastic remains in the overbought region and could turn down. MACD is bullish at the moment.

Trading Idea
Wait for better trading idea


Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation :
Last : 28,242
Target price:
Protective stop:

Outlook
This index could not break above its previous resistance high which is also near to the Fibonacci 162% projection level and has fallen inside the rising channel. It is now sitting at the resistance-turned-support zone at 27,880-28,000. As long as this zone holds, there is chance for this index to move higher again. A break below this zone will hint at further downside. Stochastic has turned down. MACD is bullish but there was divergence warning given earlier.

Trading Idea
Sell 28,610 for profit objective at 27,950. Stop should be placed above 28,850.


Nasdaq 100 Index
(CFD Symbol: USTec)
Trend :
Recommendation :
Last : 9218
Target price :
Protective stop:

Outlook
Last Friday, a new record high was created at 9177. Price broke above the rising channel and the 10EMA is acting as support at 9090. The next resistance comes in at 9447 and a move below the 10EMA will target the lower rising trendline. Stochastic is still strong but it remains in the overbought region. MACD is still strong and bullish at the moment.

Trading Idea
Wait for better trading Idea.


S&P 500 Index
(CFD Symbol: US500)
Trend :
Recommendation :
Last : 3333
Target price:
Protective stop :

Outlook
The index is currently forming an intraday all-time high at 3336. It is near to its overhead resistance of 3340. As long as price moves along with the rising 10EMA, there is chance for this index to move higher towards the next resistance at 3450. Stochastic remains at the overbought region. MACD is still bullish at the moment.

Trading Idea
Wait for better trading idea.

Related Posts

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.