- Nasdaq closed 1.4% lower and the S&P dipped slightly on Tuesday as investors sold off technology stocks that benefited from virus lockdowns, favouring sectors that have suffered most during the pandemic instead on hopes a COVID-19 vaccine will turn the economy around.
- People believe the Pfizer vaccine is going to initiate a reopening of the economy forcing people back on the road, back to work and back into the stores. Hence, it is a reopening trade to the extent the economy can reopen sooner rather than later and the stay-at-home stocks won’t be as valuable.
- Trading was also choppy at times as some investors monitored for election uncertainty after U.S. Secretary of State Mike Pompeo became the latest Republican to suggest President Donald Trump would not concede the White House to Democrat Joe Biden.
- Asian markets were mixed on Wednesday morning, as news of a working COVID-19 vaccine seemed to inoculate investors against worry about surging infections in Europe and U.S. Nikkei 225 index surged 432 points while Hang Seng index slid 24 points.
- President-elect Biden hailed the vaccine progress but he cautioned that it would be “many more months” before it is widely available. U.S. Health Secretary Alex Azar said on Tuesday that if Pfizer submits its interim COVID-19 vaccine to health regulators as quickly as expected, the U.S. government expects to start vaccinations in December.
Dow Jones Index
(CFD Symbol: US30)
Last : 29,470
On Monday, this index surged sharply and exceeded the Fibonacci 127% projection level at 29,738, but retraced to the previous high resistance-turned-support zone. It is likely to retest 29,738 if it managed to stay above this support zone. Price is also deviating from the 20EMA, suggesting the strong bullish trend now. Stochastic is turning up at the moment and there is a bullish MACD crossover.
Buy 29,200 for 29,990 with a stop below 28,830.
Hang Seng Index
(CFD Symbol: HK50)
Last : 26,277
Price is now trading within a range of 25,900 to 26,980, which is where the gap support and the Jul 20’s resistance high lie. The upper boundary of this range is also near to the Fibonacci 200% projection level of Sept-Oct 20’s rally. This index is likely to stay within this range until a breakout. Stochastic is at the overbought region and could be turning down. MACD is still strong and bullish now.
Buy 26,150 for 26,750 with a stop below 25,930
Nasdaq 100 Index
(CFD Symbol: USTec)
Last : 11,665
Target price :
There was a sharp two-day pullback that dragged price lower to the Fibonacci 62% correction point of the Nov 20’s rally. The 20EMA also comes in at this point, acting as support at the moment. As long as price stay above 11,510, there is still chance for this index to movie higher. A violation of this level would hint for a deeper correction. Stochastic could be turning down. MACD is still bullish now.
Buy 11,630 for 12,100 with a stop below 11,490.
S&P 500 Index
(CFD Symbol: US500)
Target price: 3600
Protective stop: 3515 Triggered
This index is now hovering around the previous high resistance, which is acting as support at the moment at 3549. A Shooting Star reversal candlestick was created on Monday, but there is still no follow through to confirm this reversal yet. As long as price can stay above 3515, there is still potential upside ahead. A violation of 3515 would confirm the reversal pattern and hint for a correction towards the 20EMA at 3450. Stochastic could be turning down but MACD is still bullish.
Buy 3550 for 3600 with a stop below 3515. Stop was triggered on 10 Nov.