CFD Indices – Elusive COVID-19 Vaccine & US Stimulus Sent US Indices Lower

Market News

  • Wall Street lost ground on Tuesday, with halted COVID-19 vaccine trials and an elusive U.S. stimulus agreement weighing on sentiment as third quarter earnings season got underway. All three major stock indexes closed in the red, but gains in Microsoft shares helped to mitigate the tech-heavy NASDAQ’s loss.
  • Johnson & Johnson announced on Monday it was pausing clinical trials of a COVID-19 vaccine candidate due to an unexplained illness in a study participant. Eli Lilly and Co later said it too had to pause the clinical trial of its COVID-19 antibody treatment due to a safety concern.
  • Hopes for the passage of a new coronavirus relief package faded as U.S. House Speaker Nancy Pelosi rejected the $1.8 trillion coronavirus relief proposal from the White House, saying it “falls significantly short of what this pandemic and deep recession demand.”

Market Views

  • Asian equities slipped on Wednesday morning as halted COVID-19 vaccine trials and an impasse in U.S. fiscal aid package talks soured risk appetite, while the greenback held on to gains as demand firmed for safe-harbour assets. Hang Seng index fell 22 points and Nikkei 225 index was down 12 points.
  • Tension between the European Union and Britain will also be watched by investors after the EU demanded “substantive” movement on Tuesday on fisheries, dispute settlement and guarantees of fair competition in their talks on a post-Brexit trade deal.

Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation :
Last : 28,776
Target price:
Protective stop:

Outlook
This index closed with a Bearish Harami candlestick pattern last night. As long as price didn’t violate 28,540, the Harami will not be confirmed and there is still chance for price to test the high at 29,195. A close below 28,540 would confirm the Harami and hint for a pullback towards the 20EMA at 28,120. Stochastic is rising at the moment, but is at the overbought region. MACD has turned bullish.

Trading Idea
Wait for pullback to get into a long position.


Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation : Long
Last : 24,562
Target price: 24,850
Protective stop: 24,510

Outlook
Price has penetrated the support-turned-resistance zone at 24,246 on Monday with a strong bullish candle. It is now testing the Fibonacci 62% correction point of the Aug-Sept’s decline. If price couldn’t surpass this resistance, it is likely to test the support zone at 24,246 again. A penetration of the Fibonacci 62% will hint for more upside at 25,880. Stochastic is rising now. MACD has turned bearish but there is a bullish crossover in the bearish side.

Trading Idea
Buy 24,200 for 24,850 with a stop below 23,920. Order was filled on 9 Oct. Raise stop higher to 24,510 on14 Oct.

Nasdaq 100 Index
(CFD Symbol: USTec)
Trend :
Recommendation : Long
Last : 12,168
Target price : 11,950 filled.
Protective stop: 11,540

Outlook
This index has surpassed the Fibonacci 62% correction point of the Sept’s decline, which is also the gap resistance zone. The next resistance lies at the previous high of 12,467. The 20EMA is rising at the moment, but price has deviated too far from the 20EMA, which could hint for a price correction soon. Stochastic is still moving higher now. MACD has turned bullish.

Trading Idea
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. Profit order was filled on 13 Oct.


S&P 500 Index
(CFD Symbol: US500)
Trend:
Recommendation:
Last: 3525
Target price:
Protective stop:

Outlook
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 3417, we are likely to see price moving higher towards 3588. Stochastic is rising and is at the overbought region now. MACD has turned bullish.

Trading Idea
Buy 3500 for 3550 with a stop below 3470

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