- Wall Street’s main indexes finished flat on Thursday, giving up most early gains on milder-than-feared inflation data as investors worried about the U.S. economy’s longer-term prospects and whether stocks had further room to run.
- San Francisco Fed President Mary Daly voiced that cautious tone, saying that while recent inflation data was moving in the right direction, more progress was needed before she would feel comfortable the central bank had done enough.
- President Joe Biden on Wednesday signed an executive order that prohibits some new U.S. investment in China in sensitive technologies such as computer chips and requires government notification for investment in other tech sectors.
- Asian stocks were mixed on Friday morning, with Chinese shares leading losses on persistent concerns over the property market, while data showing a rise in U.S. inflation did little to improve sentiment. Hang Seng index dropped 119 points while Nikkei 225 index rose 269 points.
- Concerns over a property market meltdown in China also saw a resurgence this week amid reports that the country’s biggest developers were struggling to meet their debt obligations.
Dow Jones Index
(CFD Symbol: US30)
Recommendation: Short @ 35,480
Target price: 34,820
Protective stop: 35,700
This index could be consolidating within a flag pattern. It is testing the 20EMA support at the moment. A violation of 35,000 will confirm the price top and hint for more downside ahead. Stochastic is falling but MACD remains bullish.
Sell 35,480 for 34,820 with a stop above 35,700. Entry was filled on 28 July.
Hang Seng Index
(CFD Symbol: HK50)
A bearish engulfing candlestick pattern was formed on 1 August after being capped by its previous price high resistance level. Price is capped by the 20EMA resistance and we are likely to see more downside if it break below 18,860. Stochastic is falling and MACD remains bearish.
Sell 19,120 for 18,300 with a stop above 19,550
Nasdaq 100 Index
(CFD Symbol: USTec)
Price was capped by its support-turned-resistance level as well as the falling 20EMA resistance point. We are likely to see price continuing its downward momentum to 14,690. Stochastic is falling and MACD is bearish.
Wait for better trading idea
FTSE 100 Index
(CFD Symbol: UK100)
Recommendation: Long @ 7486
Target price: 7670
Protective stop: 7560
Price rebounded after forming a doji candle on 3 August. However, the rebound was capped by the Fibonacci 62% correction point. We are likely to see price falling to 7430 again. Stochastic is falling and MACD is moving lower.
Buy 7486 for 7670 with a stop below 7415. Entry was filled on 4 August. Shift stop higher to 7560 to protect profit.