Market News
- Dow Jones was on the verge of ending its longest winning streak in 36 years on Thursday, successive gains showing that Wall Street’s tech-driven rally is broadening to include a wider chunk of the stock market.
- Its recent rally comes as traders widely believe that the U.S. Federal Reserve’s 25 basis point rate hike on Wednesday was the last in its campaign to control inflation. Investors are also optimistic the U.S. economy will avoid a recession.
- U.S. economy grew by 2.4% in the second quarter, beating expectations. Economists polled by Dow Jones expected the economy grew by 2% in the second quarter. This is the latest piece of data pointing toward a resilient economy, not one going into a recession.
Market Views
- Asia-Pacific markets were mixed on Friday morning as the Bank of Japan’s holds its benchmark policy rate at -0.1%, in line with expectations from economists. Hang Seng index rose 175 points while Nikkei 225 index plunged 738 points.
- Japan’s central bank adjusted its stance on its yield curve control policy, saying that it will continue to allow 10-year government bond yields to fluctuate in the range of around plus and minus 0.5%.
Dow Jones Index
(CFD Symbol: US30)
Trend:
Recommendation:
Last: 35,299
Target price:
Protective stop:
Outlook
A bearish engulfing candlestick pattern was formed yesterday, hinting at a possible price correction ahead. We are likely to see price moving lower to first support of 20EMA at 34,820. Stochastic is at the overbought zone and a bearish MACD crossover is likely.
Trading Idea
Sell 35,480 for 34,820 with a stop above 35,700
Hang Seng Index
(CFD Symbol: HK50)
Trend:
Recommendation:
Last: 19,737
Target price:
Protective stop:
Outlook
This index is currently consolidating within a triangle pattern. It price able to penetrate and close above the upper trendline, we see price moving higher to 20,420. Conversely, we could see price testing the lower trendline again.
Trading Idea
Wait for better trading idea
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend:
Recommendation:
Last: 15,487
Target price:
Protective stop:
Outlook
An evening doji star reversal candlestick pattern was formed on 20 July, hinting at possible reversal ahead. Price is testing the 20EMA support and once this support is violated, it is likely to accelerate the downward momentum to 14,810. Stochastic is falling but MACD remains bullish.
Trading Idea
Wait for better trading idea
FTSE 100 Index
(CFD Symbol: UK100)
Trend:
Recommendation: Short @ 7675
Last: 7658
Target price: 7540
Protective stop: 7680
Outlook
Price could have formed a price top at 7699 after trading near to its declining trendline. We are likely to see price retracing to 20EMA at 7550 if it is capped by the declining trendline. Stochastic is at the overbought zone and a bearish MACD crossover is likely.
Trading Idea
Sell 7675 for 7540 with a stop above 7680. Entry was filled on 26 July.
