- Wall Street’s main indexes sink on Tuesday, with Nasdaq fell most among major indexes, as weak results from Goldman Sachs weighed on financial stocks and tech shares continued their sell-off to start the year as U.S. Treasury yields rose to milestones.
- Benchmark U.S. Treasury yields jumped to two-year highs and two-year yields breached 1% as traders prepared for the Fed to be more aggressive in tackling unabated inflation, weighing on tech and growth stocks whose future expected cash flows are discounted more sharply as yields rise.
- Investors are awaiting for next week’s Fed policy meeting for more clues on central bankers’ next moves to rein in inflation. Data last week showed U.S. consumer prices increased solidly in December, culminating in the largest annual rise in inflation in nearly four decades.
- Asia Pacific stocks were mixed on Wednesday morning, with surging interest rate contributing to the continuation of a global selloff. Hang Seng index rose 156 points while Nikkei 225 index plunged 500 points.
- Oil prices hit a seven-year high overnight after Yemen’s Houthi rebels claimed responsibility for a deadly attack in Abu Dhabi earlier this week, leading to fresh tensions in the region as the United Arab Emirates vowed to retaliate against them.
Dow Jones Index
(CFD Symbol: US30)
Recommendation : Long @ 35,950
Last : 35,399
Target price: 36,650
Protective stop: 35,600 triggered
This index continued its price decline after forming a Bearish Engulfing candle on 13 Jan. Price is sinking and has violated the 20EMA. The 20EMA is falling, suggesting at the bearish price trend. Both Stochastic and MACD are falling and hint at bearish price trend. Price could continue its fall until it find support at around 35,060.
Look to buy at 35,950 for 36,650 with a stop below 35,600. Entry order was filled on 14 Jan. Stop was triggered on 18 Jan.
Hang Seng Index
(CFD Symbol: HK50)
Last : 24,195
This index managed to bounce up near to the previous low, creating a Double Bottom chart pattern. A price correction occurs but this retracement is likely to hold at the 20EMA support at 23,900. Price is currently consolidating within a Flag pattern, and we are likely to see price resuming its upward momentum and to move higher towards 25,710. Both Stochastic and MACD are strong and bullish.
Look to buy at 23,910 for 25,710 with a stop below 23,850.
Nasdaq 100 Index
(CFD Symbol: USTEC)
Recommendation : Long @ 15,630
Last : 15,138
Target price : 16,000
Protective stop: 15,400 triggered
This index was resisted by the falling 20EMA that hints for a bearish price trend. Price violated its previous low support level with a bearish candle last night as well. The bearish movement is likely to continue till Fibonacci 161% projection level at 14,630. Both Stochastic and MACD are weak.
Look to buy at 15,630 for 16,000 with a stop below 15,400. Entry price will filled on 13 Jan. Stop was triggered on 14 Jan.
S&P 500 Index
(CFD Symbol: US500)
A Bearish Engulfing candlestick pattern was seen on 13 Jan and price continues its decline since then. The 20EMA is falling, hinting at a bearish price trend. Price violated its previous low support as well as the rising trendline support, further reiterate the bearishness. We are likely to see further decline towards 4483. Both Stochastic and MACD confirm the bearish trend.
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