DJIA: US stock market trades at the highs
| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | BUY STOP |
| Entry Point | 43000.5 |
| Take Profit | 44500.0 |
| Stop Loss | 42600.0 |
| Key Levels | 40200.0, 42500.0, 43000.0, 44500.0 |
| Alternative scenario | |
|---|---|
| Recommendation | SELL STOP |
| Entry Point | 42499.5 |
| Take Profit | 40200.0 |
| Stop Loss | 43200.0 |
| Key Levels | 40200.0, 42500.0, 43000.0, 44500.0 |
Current trend
The Dow Jones index is correcting in an upward trend at 42889.0, consolidating in anticipation of a new US Fed interest rate cut.
Several officials of the regulator will speak today. Investors will pay attention to the speech of the member of the board of governors, Christopher Waller, who is a supporter of a more aggressive borrowing cost adjustment. Most likely, he will adhere to this position since the latest inflation data, despite the decline, lags the regulator’s goals. Nevertheless, according to the Chicago Mercantile Exchange (CME) FedWatch Instrument, the probability of a change in the interest rate by 25 basis points at the next meeting is 86.8%.
Stock markets are showing positive dynamics due to monetary easing, as the pressure on businesses that lasted for several years is easing gradually. The leading 10-year notes are trading at a yield of 4.106%, from 4.046% last week, the yield on the conservative 20-year notes has increased from 4.412% to 4.459%, and the yield on the 30-year notes from 4.340% to 4.382%.
Among the companies showing gains, JPMorgan Chase & Co. ( 4.44%), The Boeing Co. ( 3.00%), and The Goldman Sachs Group Inc. ( 2.50%) stand out.
The biggest decliners were Salesforce Inc. (–0.71%), Apple Inc. (–0.65%), and UnitedHealth Group Inc. (–0.06%).
Support and resistance
On the daily chart, the trading instrument is correcting above the resistance line of the ascending channel 42500.0–40000.0.
Technical indicators are strengthening the buy signal: the EMA fluctuation range of the Alligator indicator is expanding, and the AO histogram is forming ascending bars above the transition level.
Resistance levels: 43000.0, 44500.0.
Support levels: 42500.0, 40200.0.
Trading tips
Long positions may be opened after breaking through the 43000.0 level, with the target at 44500.0 and stop loss 42600.0. Implementation period: 7 days or more.
Short positions may be opened after the price declines and consolidates below the 42500.0 level, with the target at 40200.0. Stop loss — 43200.0.
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