- The S&P 500 and Dow rose in a broad-based rally on Friday with technology, healthcare and financial stocks providing the biggest lift as investors bet on a recovery that is expected to deliver the fastest economic growth since 1984.
- The Federal Reserve last week raised its GDP estimate for 2021 to 6.5% from 4.2% and many economists expect still faster growth, which has spurred fears the economy could run too hot and force the Fed to raise interest rates.
- The yield on benchmark 10-year U.S. Treasury notes rose to 1.66%, lower than a spike last week to 1.75% that sparked a selloff on inflation fears and a potential Fed rate hike – something the Fed has pledged not to do.
- Asian shares inched higher on Monday morning as the chance of yet more trillions in U.S. fiscal spending underpinned the outlook for global growth. Hang Seng index rose 82 points while Nikkei 225 index gained 307 points.
- Oil prices and commodities in general, have been supported by speculation a blockage in the Suez Canal could take weeks to clear, delaying oil shipments of a million barrels a day. There are now over 300 vessels waiting to pass through the shipping route which accounts for 12% of global trade.
Dow Jones Index
(CFD Symbol: US30)
Recommendation : Long @ 32,200
Last : 32,958
Target price: 32,800 Filled
Protective stop: 31,870
The price correction that started since 18 Mar could have ended as price rebounded after the intraday violation of the 20EMA. The 20EMA is still rising, hinting at the bullish price trend now. We are likely to see price penetrating its recent high of 33,229 for more upside at 33,610. Stochastic is still strong now and a bullish crossover is likely. MACD is also strong and bullish now despite a bearish crossover was seen.
Buy 32,200 for 32,800 with a stop below 31,870. Entry order was filled on 25 Mar. Profit order was filled on 26 Mar.
Hang Seng Index
(CFD Symbol: HK50)
Last : 28,412
Price managed to climb back above the breakdown level of 28,030 two days ago. The first resistance will be the 20EMA at 28,790. The 20EMA is still declining, suggesting a bearish price trend. Stochastic is still weak but could be forming potential divergence warning. There is also potential divergence warning given from the MACD histogram.
Buy 28,100 with a stop below 27,800 for 28,750.
Nasdaq 100 Index
(CFD Symbol: USTEC)
Last : 12,902
Target price :
This index is likely to continue ranging from 12,730-13,340 until either end is violated. A violation of the lower end of the boundary at 12,730 on a closing basis would likely bring price lower towards its previous low at 12,210. Stochastic is still strong and a bullish crossover is likely. MACD is bearish now but both of its lines are moving higher.
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S&P 500 Index
(CFD Symbol: US500)
Price ended the day with a bullish candle last Thursday after being supported by the rising 20EMA that hint for the bullish price trend now. We could see price testing its high at 3988 again. If price could not retest its previous high again, there could be a sign of weakness that hint for a possible correction ahead. Stochastic could be turning up again. MACD is still bullish now but could form potential divergence warning if the MACD’s lines couldn’t pick up the momentum.
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