CFD Indices – Ongoing COVID-19 Outbreaks Halted Wall Street Rally

Market News

  • U.S. stocks were mixed after the close on Thursday, as gains in the Utilities, Financials and Telecoms sectors led shares higher while losses in the Oil & Gas, Technology and Consumer Services sectors led shares lower.
  • U.S. Fed Chair Jerome Powell continued to hold his view that uncomfortably high inflation would be temporary, although he has said the U.S. economic recovery is far from over, with the Fed closing watching inflation before it begins asset tapering.
  • Global stocks continued to remain near record levels, but the Fed’s eventual asset tapering, ongoing COVID-19 outbreaks involving the Delta variant, indications of a peaking economic recovery and slowing corporate earnings momentum all remain as risks.

Market Views

  • Asian shares headed lower on Friday morning as profit-taking in Taiwanese chip giant TSMC, despite record profits, weighed on other tech firms and broader risk sentiment, while a more dovish U.S. rates outlook kept bond yields near multi-month lows. Hang Seng index fell 64 points and Nikkei 225 index slid 304 points.
  • Oil prices stayed under pressure and looks set for its biggest weekly decline after a compromise deal between leading OPEC producers and a surprisingly poor weekly reading on U.S. fuel demand.

Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation :
Last : 34,955
Target price:
Protective stop:

Outlook
Price is moving towards its recent high of 35,092. A correction towards the 20EMA support at 34,570 is likely if price cannot surpass its high. It has to break through its high for more upside ahead. Stochastic is at the overbought region now. MACD has turned bullish

Trading Idea
Buy 34,600 for 35,080 with a stop below 34,350

Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation :
Last : 27,924
Target price:
Protective stop:

Outlook
This index managed to climb back inside the rectangle consolidation zone that started since March 2021 after violating it on 8 July. Price tested its first 20EMA resistance yesterday. It has to penetrate the 20EMA for more upside towards the upper end of the consolidation zone. Stochastic is rising now but MACD has turned bearish.

Trading Idea
Wait for better trading idea

Nasdaq 100 Index
(CFD Symbol: USTEC)
Trend :
Recommendation :
Last : 14,761
Target price :
Protective stop:

Outlook
Price reached a high at 15,003 on 14 July, forming potential Tweezer top pattern. This index is likely to have a price correction towards the 20EMA support at 14,600. A violation of the 20EMA would hint for deeper correction. Stochastic is falling from the overbought region now. MACD is still bullish but had a bearish crossover.

Trading Idea
Wait for better trading idea.

S&P 500 Index
(CFD Symbol: US500)
Trend:
Recommendation:
Last: 435
Target price:
Protective stop:

Outlook
Price broke out from the Triangle chart pattern on 25 June. It rebounded after being support by the upper edge of the trend line of the triangle together with the 20EMA. It is going to hit the 20EMA support at 4323 and if this support holds, we are likely to see the resume upward momentum. Stochastic is falling now. MACD remains bullish but has given divergence warning.

Trading Idea
Buy 4325 for 4390 with a stop below 4285

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