Equity markets extended its fall for the second day after the arrest of a senior Huawei executive in Canada surfaced. This raises the spectre of a more trade tensions between the US and China. In particular, many Chinese telecom stocks slumped in today’s trading.
For Dow, this week’s correction wiped out its recent gains. Prices are now approaching the 24,000 level once more, thus increasing the pressure on this support. Can this floor stem the latest decline?
Technically, it seems yes. This level has acted as a buffer four or five times (see below). Although prices may overshoot this level to – say, 23,500 or 23,000, support buying is generally observed here.
However, if prices do crash through this floor, then Dow’s medium-term outlook would be distinctly negative as its long-term pattern will turn toppy.
The above references the authors opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
Jackson has over 10 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world largest institutions and hedge funds. Jackson’s expertise include global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research. Jackson has a PhD in Finance from Durham University.