- The S&P 500 eked out a 2 points gain on Thursday after losing ground going into the close, but downside momentum was kept in check by a chip-fueled rise in tech and strength in materials. The Dow was down 158 points while the Nasdaq gained 81 points.
- U.S. stocks staged a modest recovery on Thursday, led by technology shares, after a jump in bond yields in response to inflation data on Wednesday took the market down the day before, but the S&P 500 still looks on track for its first loss in six weeks.
- Wednesday’s strong U.S. inflation reading fanned expectations the Fed would tighten monetary policy faster than previously thought after surprisingly strong reading on U.S. inflation which rose 6.2%, which was the strongest in the past 30 years.
- Asian share prices were mostly up on Friday morning, with a rebound in Chinese technology shares giving sentiment a boost after a shock from Wednesday’s strong U.S. inflation reading ebbed, with investors now hopeful that the worst price hikes could be soon over. The Nikkei 225 gained 300 points but the Hang Seng Index slipped 1 point on Friday morning.
- While the inflation data suggested that the current wave of price spikes due to chronic worldwide supply constraints could have more staying power than many had hoped, many investors still think inflationary pressure will eventually ease, rather than strengthen.
Dow Jones Index
(CFD Symbol: US30)
Recommendation : Short @ 36,400
Last : 35,960
Target price: 35,650
Protective stop: 36,600
Price reached a high five days ago and has continued to move lower, coming close to the 20EMA support point. Stochastic continues to decline. MACD has developed a bearish divergence, warning of a possible price high. 20EMA remains bullish. We could see the decline continues lower to the support at 35,500.
Sell 36,400 with a stop above 36,600 for 35,650. Entry order was filled on 9 Nov.
Hang Seng Index
(CFD Symbol: HK50)
Recommendation : Long @ 24,750
Last : 25,282
Target price: 25,350 Filled
Protective stop: 24,450
A possible Dark Cloud Cover might be hinting that this index could have hit a high at 25,610. If this index ends today with this candlestick pattern, we are likely to see a correction. However, Stochastic has a bullish crossover in the oversold zone and is moving higher, hinting of a price rally. MACD is bullish and is turning around as well.
Buy 24,750 for 25,350 with a stop below 24,450. Entry price was filled on 10 Nov. Profit target was reached on 12 Nov.
Nasdaq 100 Index
(CFD Symbol: USTEC)
Last : 16,056
Target price :
A Doji candlestick 5 days ago might be a hint that this index had reached a high and could be due for a correction. In fact, this index has been moving within a rising channel since Sep 2020. Stochastic is at the overbought zone and could be hinting of a price decline ahead. MACD remains bullish and is hinting of a bullish price trend ahead.
Buy 15,780 for 16,250 with a stop below 15,580
S&P 500 Index
(CFD Symbol: US500)
This index hit a high of 4718 five days ago and has been declining since that high. The correction has brought this index near to the 20EMA which remains bullish. If price can stay above the 20EMA support, the bullish trend can continue. Stochastic is in the overbought region but MACD remains bullish.
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