Cloudy geopolitical outlook

U.S stock market ready for a lower open after a long holiday and a week full of geopolitical uncertainties. There is a fresh new concern on the North Korean missile launch. The missile launch results in failure, but the U.S government take it as a challenge to the U.S military strength. Aside from North Korea, there is news of U.S bombing mission over Afghanistan. Both news unsettled investors and inevitably will trigger risk aversion.

European is in Holiday today, while Asian indices mostly underwater on the growing tension. Traders might continue stay sideline under current situation and hope the geopolitical tension ease in this week.

Technical Analysis

Dow Jones Industrial Averages (INDU)

Dow Jones Industrial Averages sharply lower on the previous trading day, the index might continue lower if the price could break below 20,412 low. If it manages to break lower, 20,000  is the downside target after the breakout.

Alcoa Corporation (AA)

AA is on the path lower inside the bearish channel. The move inside bearish channel also closes below the daily SMA 200 which indicate more bearish pressure forward. It is suggested to stay sideline under current situation and wait for either strong bullish reversal pattern or a sharp bearish thrust downward.

Canadian Pac Railway (CP)

The triangle pattern in CP share prices is pretty obvious. The price is moving inside the triangle pattern, and it is expected to continue bouncing inside the triangle. Traders could look for a bearish position with a stop loss above the previous candle touching the top of the channel. The short position has daily averages as the target with extension at the bottom of the channel.

Other Watchlist

CBS – look for a close above the daily SMA 50 to confirm bounce.

CUBE – the price is near the intersection, look for a price pattern near the daily SMA 200.

CCL – bullish trend in the shares prices is intact, the share might continue to find support at daily SMA 50.

NOK – the switch above daily SMA 200 happened, and the bull might buy the share price after the successful test of the daily SMA.

BBT – the price keep falling lower, it is near the daily SMA 200 where traders could look for a long position.

CSCO – watch $31.80 as a support level.