CFD Indices – Optimism Over US Stimulus Fueled Indices Rally

Market News

  • Wall Street shares closed higher Tuesday on growing optimism that U.S. lawmakers are nearing a deal on a stimulus package aimed at cushioning the economic shock from the coronavirus pandemic. Dow Jones rose 113 points, while S&P 500 and Nasdaq Composite gained more than 0.3%.
  • U.S. government stepped up an offensive on Tuesday to keep China’s Huawei Technologies out of Brazil’s 5G market, with Washington offering to finance purchases by Brazilian telecom companies of equipment from its competitors.
  • The White House and Democrats in the U.S. Congress moved closer to agreement on a new coronavirus relief package on Tuesday as Trump said he was willing to accept a large aid bill despite opposition from his own Republican Party. Negotiations will continue on Wednesday, an aide to top U.S. Democrat Nancy Pelosi said.

Market Views

  • Asia Pacific stocks rose on Wednesday morning as renewed hopes for a new round of U.S. stimulus drew money into equities from government debt. Hang Seng index gained 174 points and Nikkei 225 index was up 109 points.
  • Benchmark U.S. Treasury yields hit a four-month high and the yield curve steepened on expectations for more U.S. fiscal spending, but some investors remain cautious about the chances of a deal before the U.S. presidential election on Nov. 3.

Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation :
Last : 28,474
Target price: 28,940
Protective stop: 28,150 Triggered

This index could be moving within a rising channel that was formed since Jun 20. Price is now sitting and rebounding from the 20EMA, which is acting as support at the moment. If price can close above 20EMA, it is likely to continue moving upwards, supported by the bullish MACD and the strong Stochastic indicators. Stochastic is still strong near the overbought region

Trading Idea
Buy 28,500 for 28,940 with a stop below 28,150. Stop was triggered on 19 Oct

Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation :
Last : 24,719
Target price: 24,250
Protective stop: 24,830 Triggered

Price gapped up today and is now testing the overhead Fibonacci 62% correction point of the Aug-Sept’s decline. The 20EMA is rising now, suggesting a bullish trend now. If price cannot breakthrough this resistance, a price correction to the 20EMA at 24,290 can be expected. It has to surpass this resistance for further upside. Stochastic is rising now and is at the overbought region. MACD has turned bearish.

Trading Idea
Sell 24,700 for 24,250 with a stop above 24,830. Stop was triggered on 21 Oct

Nasdaq 100 Index
(CFD Symbol: USTec)
Trend :
Recommendation : Long
Last : 11,741
Target price : 12,000
Protective stop: 11,450

Price has been correcting and is now sitting at the 20EMA support, which coincides with the Fibonacci 38% correction point of Sep-Oct’s rally. This support is also the gap resistance-turned-support zone. The 20EMA is still rising, suggesting a bullish trend now. Look for price to resume its upward momentum towards 12,467 if this index can hold above the 20EMA. Stochastic is falling now. MACD has turned bullish.

Trading Idea
Buy 11,650 for 12,000 with a stop below 11,450. Order was filled on 19 Oct.

S&P 500 Index
(CFD Symbol: US500)
Recommendation: Long
Last: 3463
Target price: 3550
Protective stop: 3415

Price is now sitting and appears to rebound from the 20EMA support. The 20EMA is now rising, hinting at the bullish trend now. This support is also coinciding with the Fibonacci 38% correction point of Sep-Oct 20’s rally. As long as price stays above the 20EMA at 3431, we are likely to see price moving higher towards 3588. Stochastic is falling now. MACD has turned bullish.

Trading Idea
Buy 3470 for 3550 with a stop below 3415. Order was filled on 19 Oct.

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