- Wall Street ended sharply higher after a volatile session on Friday, with the Nasdaq rebounding at the end of a week that saw it extend losses to about 10% from its previous record high. All three main indexes bounced back from losses earlier in the day, with investors in recent sessions spooked by rising interest rates that offset optimism about an economic rebound.
- Rising interest rates disproportionately hurt high-growth tech companies because investors value them based on earnings expected years into the future, and high interest rates hurt the value of future earnings more than the value of earnings made in the short term.
- The benchmark 10-year U.S. Treasury yields hit a new one-year high of 1.626% after nonfarm payrolls increased by 379,000 jobs last month, blowing past a rise of 182,000 forecast by economists polled by Reuters.
- Asian shares were mixed on Monday morning after the U.S. Senate passage of a $1.9 trillion stimulus bill augured well for a global economic rebound, though it also put fresh pressure on Treasuries. Hang Seng index slid 303 points while Nikkei 225 index rose 61 points.
- Oil prices were up the highest levels in more than a year after Yemen’s Houthi forces fired drones and missiles at the heart of Saudi Arabia’s oil industry on Sunday, raising concerns about production.
Dow Jones Index
(CFD Symbol: US30)
Last : 31,520
Price rebounded strongly after hitting the Fibonacci 62% key correction point of Feb’s rally. It has to surpass 31,670 for price to retest its high at 32,077. The 20EMA is flat now, suggesting the sideways trend. Stochastic is turning up but still looks weak at the moment. MACD is still bullish and a bullish crossover could be likely.
Buy 30,930 for 31,700 with a stop below 30,500.
Hang Seng Index
(CFD Symbol: HK50)
Last : 28,563
Price violated both the rising trendline support that formed since Dec 2021 and the 20EMA support on 26 Feb. The 20EMA is falling now, suggesting a bearish trend. It is also acting as a resistance at 29,410. The next support lies at 28,000. Stochastic is falling now. MACD is still bullish but there is a bearish crossover.
Sell 29,400 for 28,550 with a stop above 29,990
Nasdaq 100 Index
(CFD Symbol: USTEC)
Recommendation : Short @12,670
Last : 12,532
Target price : 12,100
Protective stop: 13,110
Price rebounded after hitting the Fibonacci 161% projection level. However, there is an overhead support-turned-resistance that comes in at 12,730. Price has to breakthrough this resistance for further upside. Else, we are likely to see price falling again. Stochastic is near to the oversold region but MACD has turned bearish.
Sell 12,670 for 12,100 with a stop above 13,110. Entry was filled on 8 Mar.
S&P 500 Index
(CFD Symbol: US500)
This index broke below the rising trendline that formed since Mar 2020 last Thursday with a bearish candlestick. The 20EMA is falling now, suggesting a bearish price trend now. If price cannot move above the rising trendline, we might see price falling again. Stochastic could be turning up. MACD is still bullish but the slow line is approaching to the zero line.
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