- Wall Street turned a rally into a sell-off on Tuesday, reversing earlier gains as impending monetary tightening from the Fed once again pulled growth stocks back into red territory. Dow Jones fell 87 points, S&P 500 was down 15 points and Nasdaq Composite slid 40 points.
- The turnabout began in earnest shortly after remarks from Fed Governor Lael Brainard, who reiterated the need for the central bank to “expeditiously” take on decades-high inflation. The comments coming out from Fed officials have been more hawkish than the markets have anticipated.
- Data published on Tuesday showed U.S. monthly consumer prices increased by the most in 16-1/2 years in March as war in Ukraine boosted the cost of gasoline to record highs, cementing the case for a 50 basis points interest rate hike from Fed next month.
- Asian shares gained on Wednesday morning, boosted by U.S. inflation figures that fared better than markets’ worst expectations, causing U.S. yields to pause their march higher. Hang Seng index was up 31 points and Nikkei 225 index advanced 449 points.
- Market sentiment was also capped by gains in oil and other commodity prices after Russian President Putin said that on-and-off peace negotiations have again returned to a dead-end situation, which also hurt the euro.
Dow Jones Index
(CFD Symbol: US30)
Price is having a correction after forming an Evening Star candlestick pattern. It is currently sitting at the Fibonacci 38% correction point and if this support holds, we see price rebounding to retest its high again. Stochastic is near to the oversold region and MACD is turning up.
Buy 34,180. Stop at 33,850 and profit target at 34,900.
Hang Seng Index
(CFD Symbol: HK50)
Recommendation: Long @ 22,050
Target price: 23,400
Protective stop: 21,450 Triggered
Price moved below the 20EMA and is currently sitting at the Fibonacci 38% correction point. If it is unable to move above the gap resistance zone, we see a further price correction. Stochastic is falling. MACD has turned bearish.
Buy 22,050 for 23,400 with a stop below 21,450. Entry order was filled on 7 April. Stop was triggered on 11 April.
Nasdaq 100 Index
(CFD Symbol: USTec)
Price moved below the 20EMA and is currently sitting at the key Fibonacci 62% correction point. It has to stay above this support to resume its uptrend. A possible rebound is likely as Stochastic is at the oversold region. MACD is bearish.
Wait for better trading idea.
Nikkei 225 Index
(CFD Symbol: JP225)
This index rebounded after retracing to the key Fibonacci 62% correction point. Price formed a bullish engulfing candlestick pattern. Stochastic is at the oversold region but MACD remain bearish. We see price rebounding to move higher.
Wait for better trading idea