- Stocks on Wall Street closed lower on Thursday as investors shifted out of big technology names, while an unexpected rise in weekly U.S. jobless claims pointed to a fragile recovery in the labour market. Apple, Tesla and Facebook weighed the most on both the S&P 500 and the Nasdaq.
- Concerns over a rising inflation outlook have pushed investors to book profits on stocks with high valuations in the S&P 500 technology and communications services sectors, which have underpinned a 76% rise in the S&P 500 since its March 2020 lows.
- A Labour Department report showed initial claims for state unemployment benefits rose to 861,000 last week from 848,000 the prior week, partly due to potential claims related to the temporary closure of automobile plants due to a global semiconductor chip shortage.
- Asian markets pulled back from all-time peaks on Friday morning as higher longer-dated bond yields and underwhelming U.S. data dented investor confidence in a faster economic recovery from the COVID-19 pandemic. Hang Seng index slid 375 points and Nikkei 225 index plunged 288 points.
- Oil prices slid as much as 2% in early trade on Friday, adding to overnight declines, on worries that refineries shut by a big freeze in the U.S. South will take some time to revive operations and dent crude demand.
Dow Jones Index
(CFD Symbol: US30)
Recommendation : Long @ 31,300
Last : 31,400
Target price: 31,700
Protective stop: 31,110
This index created an all-time high of 31,724 on 16 Feb. It has slightly pullback towards the 20EMA at 31,215. Price has to sustain above the 20EMA and breaks above the high for further upside for 32,290. There is divergence warning given from the MACD that warns for potential top. Stochastic is also at the overbought region but still looks strong.
Buy 31,300 for 31,700 with a stop below 31,110. Entry order was filled on 18 Feb
Hang Seng Index
(CFD Symbol: HK50)
Last : 30,247
There is a bearish Engulfing candlestick pattern formed yesterday, bringing price lower to the gap support that created on 16 Feb. As long as this gap is not closed, there is chance for price moving higher again. The 20EMA is also acting as support at 29,560. However, there is divergence warning given from both the Stochastic and MACD. Stochastic is falling now. MACD is also bullish and a bearish crossover is likely.
Sell 30,650 for 29,900 with a stop above 31,105.
Nasdaq 100 Index
(CFD Symbol: USTEC)
Last : 13,572
Target price :
Price created an all-time high of 13,908 on 16 Feb, but ended the day with an bearish Engulfing candlestick pattern. It has to surpass this high for further upside. Price is now sitting at the 20EMA support at 13,520. With the potential divergence warning given from the MACD indicator, a violation of the 20EMA would hint for a deeper correction. Stochastic is falling now but MACD is still bullish.
Wait for better trading idea
S&P 500 Index
(CFD Symbol: US500)
Recommendation: Long @ 3920
Target price: 3990
Protective stop: 3885 Triggered
This index created an all-time high of 3963 on 16 Feb, but ended the day with an Engulfing candlestick pattern. Price has to breakthrough this high for further upside. The 20EMA will be providing the first layer of support at 3880. A violation of the 20EMA would hint for a deeper correction. Stochastic is at the overbought region but MACD is still bullish.
Buy 3920 for 3990 with a stop below 3885. Entry order was filled on 17 Feb. Stop was filled on 18 Feb.