- U.S. stocks rose on Friday and the S&P 500 and Nasdaq rose 3.8% and 4.6% respectively, registered their biggest weekly percentage gains since July as optimism over more federal fiscal aid grew. The Dow added 3.3%, its biggest weekly gain since August.
- The Trump administration on Sunday called on Congress to pass a stripped-down coronavirus relief bill, as talks on a more comprehensive plan were again at an impasse. A new $1.8 billion White House proposal has drawn criticism from both Democrats and Republicans, yet investors seem optimistic that spending will resume at some point.
- Strategists say investors have also begun to digest the possibility of Democratic candidate Joe Biden winning the Nov. 3 presidential election after a fractious debate last month led to a jump in his lead over Trump in several national polls, since the Democrats are pushing harder for spending.
- Asian stock markets began the week with cautious gains on Monday morning, as investors clung to hopes for U.S. stimulus spending, while the dollar firmed after a Chinese central bank policy tweak unwound some of the yuan’s steep gains. Hang Seng index surged 410 points while Nikkei 225 index fell 75 points.
- The People’s Bank of China has scrapped a requirement for banks to hold a reserve of yuan forward contracts, removing a guard against depreciation, which traders said suggested authorities were discomfited by recent gains.
Dow Jones Index
(CFD Symbol: US30)
Last : 28,636
The Bearish Engulfing candlestick pattern that formed on 5 Oct was invalidated as this index has surpassed the Engulfing’s high. The 20EMA is rising and is acting as support at the moment. We are likely to see price move higher towards the previous high of 29,195. Stochastic is rising at the moment. MACD is still bearish but there was a bullish crossover.
Buy 28,500 with a stop below 28,220 for 29,190.
Hang Seng Index
(CFD Symbol: HK50)
Recommendation : Long
Last : 24,590
Target price: 24,850
Protective stop: 23,920
Price has penetrated the support-turned-resistance zone at 24,246 today with a strong bullish candle. Let’s see if price can close firm above this zone for more upside towards 24,900. The 20EMA is bullish and is moving up at the moment. Stochastic is also turning up now. MACD has turned bearish but there is a bullish crossover in the bearish side.
Buy 24,200 for 24,850 with a stop below 23,920. Order was filled on 9 Oct.
Nasdaq 100 Index
(CFD Symbol: USTec)
Recommendation : Long
Last : 11,782
Target price : 11,950
Protective stop: 11,540
This index is now testing the Fibonacci 62% correction point of the Sept’s decline, which is also the gap resistance zone. If price can penetrate above 11,780, there is chance for this index to test the previous high of 12,467. The 20EMA is rising at the moment. Stochastic is still moving higher now. MACD is bearish but there is a bullish crossover.
Buy 11,350 for 11,800 with a stop below 11,100. Order was filled on 2 Oct. Raise stop to cost at 11,350. Recommend raising stop higher to 11,540 and profit target to 11,950 on 12 Oct.
S&P 500 Index
(CFD Symbol: US500)
Price has been moving higher after breaking above the declining trendline and the 20EMA. The 20EMA is rising at the moment, showing the bullish trend now. As long as price stays above the 20EMA at 3390, we are likely to see price moving higher towards 3588. Stochastic is rising and is near to the overbought region now. MACD is bearish but there is a bullish crossover.
Wait for pullback to get into a long position