Author: Shueh Ting Wong

Market News

• U.S. stocks closed higher for a second straight day on Thursday on mounting optimism that a U.S. debt ceiling deal could be reached within days, with discount retailer Walmart providing additional support after an upbeat annual sales forecast.

• The benchmark S&P 500 index rebounded from early declines on news that top U.S. congressional Republican Kevin McCarthy said a deal to raise or suspend the debt ceiling could potentially be reached in time to hold a House vote next week.

• President Joe Biden and McCarthy reiterated their aim to strike a deal soon to raise the $31.4 trillion federal debt ceiling and agreed to talk as soon as Sunday. The debt ceiling has drawn attention away from uncertainty about Fed’s stance on interest rates.

Market Views

• Asian markets were mixed on Friday morning over raising the U.S. debt ceiling, although concerns over a slowing economic recovery in China and a hawkish Fed kept gains limited. Hang Seng index fell 189 points while Nikkei 225 index gained 263 points.

• The Hang Seng was pressured by losses in e-commerce giant Alibaba Group, which tumbled 5.3% after its first-quarter revenue missed estimates. The group is facing slowing demand in China as the country’s digital markets mature and as it faces increased competition from other players.

Dow Jones Index
(CFD Symbol: US30)

Trend:

Recommendation:

Last: 33,559

Target price:

Protective stop:

Outlook
Price rebounded from its previous low support zone with a bullish engulfing candlestick pattern. However, there is a nearer resistance at 33,744 that price has to breakthrough for 34,260. There is a bullish Stochastic crossover. MACD is rising towards the zero line.

Trading Idea
Wait for better trading idea

Hang Seng Index
(CFD Symbol: HK50)

Trend:

Recommendation:

Last: 19,461

Target price:

Protective stop:

Outlook
This index is trading near to its lower boundary of the sideway consolidation zone. We think that price has higher chance to break down this consolidation zone to 18,810. The 20EMA is falling and the MACD remains bearish.

Trading Idea.
Sell 19,840 for 18,850 with a stop above 20,000.

Nasdaq 100 Index
(CFD Symbol: USTec)

Trend:

Recommendation: Short @ 13,450

Last: 13,862

Target price: 13,230

Protective stop: 13,520

Outlook
Price hit its Fibonacci 261% projection level today after the breakout. As price is trading far above the 20EMA and the Stochastic is at the overbought zone, we think that price may have a correction to the 20EMA before the next strong movement.

Trading Idea
Sell 13,450 for 13,230 with a stop above 13,520. Entry and stop orders were filled on 17 May.

FTSE 100 Index
(CFD Symbol: UK100)

Trend:

Recommendation: Short @ 7772

Last: 7766

Target price: 7670

Protective stop: 7820

Outlook
Price was resisted by its overhead 20MA resistance point. As long as it moves below the 20MA, we are likely to see price testing 7564. Stochastic remains weak and MACD is still bearish at the moment.

Trading Idea
Sell 7772 for 7670 with a stop above 7820. Entry order was filled on 18 May.

Market News

• U.S. stock closed lower on Tuesday after a disappointing forecast from Home Depot and U.S. retail sales data for April pointed to softer consumer spending, while uncertainty about interest rates and debt limit negotiations weighed on sentiment.

• Home Depot declined 2.15% as one of the biggest drag on both the Dow Industrials and S&P 500 after the home improvement retailer cut its annual sales forecast and projected a steeper-than-expected decline in profit.

• The Commerce Department reported retail sales rose 0.4% in April, short of the estimate for an increase of 0.8%. But core retail sales rebounded, a figure excluding automobiles, gasoline, building materials and food services.

Market Views

• Asia Pacific markets were mixed on Wednesday as markets remained on edge over slowing growth in China and the U.S. debt ceiling. Hang Seng index slipped 158 points while Nikkei 225 index jumped 0.9% to a near 20-month high as Japan’s economy grew more than expected in the first quarter.

• Quad leaders also canceled a planned meeting in Sydney next week as U.S. President Joe Biden cut his Asia trip short to return to the U.S. for talks on the debt ceiling.

Dow Jones Index
(CFD Symbol: US30)

Trend:

Recommendation:

Last: 33,015

Target price:

Protective stop:

Outlook
Price was resisted by the falling 20EMA that hints at potential downside ahead. MACD is bearish and is moving lower. We are likely to see price continuing its downward movement if it breaks below its recent price low of 32,910.

Trading Idea
Wait for better trading idea

Hang Seng Index
(CFD Symbol: HK50)

Trend:

Recommendation: Sell @ 20,230

Last: 19,792

Target price: 19,210

Protective stop: 20,000 triggered

Outlook
This index is consolidating within a sideway rectangle zone. It will continue its sideway movement until either end is broken. Stochastic is still weak and MACD is bearish. We think price will go 18,810 if it break below 19,380.

Trading Idea.
Sell 20,230 for 19,210 with a stop above 20,300. Entry was filled on 5 May. Shifted stop lower to 20,000. Stop was filled on 15 May.

Nasdaq 100 Index
(CFD Symbol: USTec)

Trend:

Recommendation:

Last: 13,449

Target price:

Protective stop:

Outlook
Price is trading near to Fibonacci 161% projection level yesterday. Stochastic is at the overbought zone but MACD remains bullish. We think price could retrace to the 20EMA at 13,210 in the coming days unless it further break above 13,510.

Trading Idea
Sell 13,450 for 13,230 with a stop above 13,520.

FTSE 100 Index
(CFD Symbol: UK100)

Trend:

Recommendation:

Last: 7731

Target price:

Protective stop:

Outlook
Price was resisted by its overhead 20MA resistance point. As long as it moves below the 20MA, we are likely to see price testing 7564. Stochastic remains weak and MACD is still bearish at the moment.

Trading Idea
Sell 7772 for 7670 with a stop above 7820