CFD Indices – Slow Down In China’s Factory Activity Sent HK50 Lower

Market News

  • U.S. stocks were higher after the close on Thursday. The Dow gained 0.71%, S&P 500 rose 0.68% and the Nasdaq Composite climbed 0.22%, due to the gains in the Telecoms, Financials and Oil & Gas sectors such as Nike, JP Morgan and United Health Group.
  • The global economy will benefit from spill‑overs via higher US imports.  The combination of low interest rates, an improving US economy and an improving global economy is a recipe for the USD to continue on its downward trend.
  • Investors are expecting U.S. government support to continue even after Thursday’s positive economic data. They also continue to digest President Joe Biden’s proposed $1.8 trillion social package and infrastructure plans, as well as the Fed’s continued dovish monetary policy.

Market Views

  • Asia-Pacific markets struggled for gains in Friday morning as investors turned cautious, despite a positive finish stateside in the previous session. Hang Seng index slumped 449 points and Nikkei 225 index fell 145 points.
  • Data showed China’s factory activity expanded at a slower-than-expected pace in April as the official manufacturing Purchasing Manager’s Index fell to 51.1, from 51.9 in March. A reading above 50 indicates expansion.

Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation :
Last : 33,984
Target price:
Protective stop:

Outlook
Price is currently consolidating within a triangle pattern after hitting a high at 34,253 on 16 Apr. The 20EMA will be the first layer of support at 33,740. We look forward for price breaking out from the triangle to continue its upward momentum.  Stochastic is falling at the moment but MACD remains strong now.

Trading Idea
Buy 33,655 for 34,000 with a stop below 33,500.

Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation : Long @ 28,900
Last : 28,844
Target price: 29,550
Protective stop: 28,690

Outlook
Price was resisted by the price resistance at 29,180. It could be forming a reversal candlestick pattern of Evening Doji Star now. Stochastic is falling and MACD has turned bullish but a bearish crossover is likely. Price could retest its low if the reversal pattern is confirmed.

Trading Idea
Buy 28,900 for 29,550 with a stop below 28,690. Entry order was filled on 27 Apr

Nasdaq 100 Index
(CFD Symbol: USTEC)
Trend :
Recommendation : Long @ 13,900
Last : 13,901
Target price : 14,300
Protective stop: 13,650

Outlook
This index is now consolidating where the 20EMA is acting as support at the moment at 13,780. It has to surpass its recent high of 14,076 for more upside ahead. A violation of the 20EMA is likely to bring price lower. Stochastic is falling now and is giving potential divergence warning. MACD is still bullish.

Trading Idea
Buy 13,900 for 14,300 with a stop below 13,650. Entry order was filled on 20 Apr

S&P 500 Index
(CFD Symbol: US500)
Trend:
Recommendation:
Last: 4197
Target price:
Protective stop:

Outlook
Price hit the Fibonacci 200% projection level and a new high was created at 4218 last night. The 20EMA is rising and is acting as first layer of support at 4137. Stochastic is still at the overbought region now and MACD remains bullish. Do watch out for reversal candlestick pattern as there is potential divergence warning given from the Stochastic

Trading Idea
Wait for better trading idea

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