- U.S. stocks closed near break-even on Friday as investors sold technology shares that have rallied through the pandemic and rotated into cyclical stocks set to benefit from pent-up demand once the coronavirus pandemic is subdued.
- The Dow hit an all-time intraday peak, led by Caterpillar, after Deere raised its 2021 earnings forecast. Deere reported profit more than doubled in the first quarter on rising demand for farm and construction machinery.
- Federal Reserve Chair Jerome Powell delivers his semi-annual testimony before Congress this week and is likely to reiterate a commitment to keeping policy super easy for as long as needed to drive inflation higher.
- Asia Pacific markets inched up on Monday morning as expectations for faster economic growth and inflation globally battered bonds and boosted commodities, though rising real yields were making equity valuations look more stretched in comparison. Hang Seng index rose 100 points and Nikkei 225 index gained 232 points.
- Oil prices rose on Monday as the slow return of U.S. crude output that was cut by frigid conditions raised concerns about supply just as demand is coming back from the depths of the coronavirus pandemic.
Dow Jones Index
(CFD Symbol: US30)
Recommendation : Long @ 31,300
Last : 31,444
Target price: 31,700
Protective stop: 31,110
The recent price movement for this index were relatively small. It could now be consolidating within a Flag pattern. The 20EMA is acting as support at 31,240. Stochastic is still strong at the overbought region. MACD is also bullish despite the bearish crossover that hints for the correction. Price has to breakout from the Flag and to surpass its all-time high of 31,724 for more upside.
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)
Recommendation : Short @ 30,650
Last : 30,687
Target price: 29,900
Protective stop: 31,105
There is a bearish Engulfing candlestick pattern formed on 18 Feb, bringing price lower to the gap support that created on 16 Feb. However, price managed to stay above this gap support. As long as this gap is not closed, there is chance for price moving higher again. The 20EMA is also acting as support at 29,710. Stochastic could be falling soon. MACD is still bullish.
Sell 30,650 for 29,900 with a stop above 31,105. Entry order was filled on 19 Feb.
Nasdaq 100 Index
(CFD Symbol: USTEC)
Last : 13,555
Target price :
Price created an all-time high of 13,908 on 16 Feb, but ended the day with a bearish Engulfing candlestick pattern. It has to surpass this high for further upside. Price is now sitting at the 20EMA support at 13,530. 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)
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 falling from the overbought region but MACD is still bullish.
Buy 3880 for 3950 with a stop below 3835.