Market News
- Nasdaq closed lower on Friday though well above its session low as selling eased late in the day after investors dumped heavyweight technology stocks due to concerns about high valuations and a patchy economic recovery. Dow Jones slid 159 points and S&P 500 fell 28 points.
- While Thursday’s sell-off already reflected investor fears that valuations for the Nasdaq high-flyers had overheated, the worries were exacerbated on Friday by the Financial Times (FT) and others reporting that options trading by Japan’s Softbank had inflated these stocks.
- Some fund managers have warned that the declines could be a preview of a rocky two months ahead of the Nov. 3 presidential election as institutional investors return from summer vacations and also refocus on potential economic pitfalls.
Market Views
- Asian shares were mixed on Monday morning as investors grappled with sky-high valuations against the backdrop of a global economy in the grip of a deep coronavirus-induced recession while oil prices dropped sharply. Hang Seng index rose 35 points while Nikkei 225 index fell 78 points.
- Policy meetings at the Bank of Canada on Wednesday and the European Central Bank (ECB) the following day are also on investors’ radar, with both expected to keep policy steady.
Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation :
Last : 28,129
Target price:
Protective stop:
Outlook
A new all-time high was created at 29,195 last Thursday, but unfortunately this index closed the day with a Bearish Candlestick pattern that wiped off the previous two days’ gains. It is now sitting at the 20EMA support at 28,110. With the divergence warning given from both the Stochastic and MACD, a violation of the 20EMA would bring price lower towards 27,430. Stochastic is falling at the moment but MACD is still bullish.
Trading Idea
Wait for better trading idea
Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation :
Last : 24,751
Target price:
Protective stop:
Outlook
Price broke below the rising trendline support that has formed since Mar 20 last Thursday. Currently this index pullback is capped by the rising trendline again. Let’s watch out for the price reaction at this trendline. If price unable to penetrate the trendline, we are likely to see a further selling pressure towards 24,240 or 23,780. Stochastic is falling at the moment and MACD has a bearish crossover.
Trading Idea
Wait for better trading idea
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend :
Recommendation : Long
Last : 11,450
Target price : 12,400
Protective stop: 11,350 triggered
Outlook
A huge Bearish Engulfing reversal candle was formed last Thursday, wiping off the previous six days’ gains and bringing price lower to the first layer of 20EMA support. Unfortunately, price unable to stay above the 20EMA and felt to the Fibonacci 62% correction point of 11,140. If this support holds, we could see a possible rebound from this key support. A violation of 11,140 would hint for deeper correction. Stochastic is falling at the moment. MACD is bullish but just had a bearish crossover.
Trading Idea
Buy 11,600 for 12,400 with stop below 11,350. Stop was triggered on Friday
S&P 500 Index
(CFD Symbol: US500)
Trend:
Recommendation:
Last: 3412
Target price:
Protective stop:
Outlook
Price broke below the 20EMA support last Friday, and dipped close to the Fibonacci 38% correction point, after being brought lower by the Bearish Engulfing reversal candlestick. However, there is a price rejection at this correction point. As long as 3340 support holds, there is a chance for price to move higher again. A violation of 3340 would hint for deeper correction. Stochastic is falling at the moment. MACD is still bullish but just had a bearish crossover
Trading Idea
Wait for better trading idea
