The U.S stock market starts the week bullish

The stock market has suffered bearish pressure this month as inflation numbers continue to stay at high levels and the Fed looks uncertain about their planned rate cut. Higher for longer is the current narrative and it might provide more opportunities for traders to enter long positions at a lower level. We maintain the bullish outlook for the long-term and expect more bearish pressure in the short-term. Despite the bearish pressure, traders will prepare themselves to add long positions at a lower level.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index pushed lower and reached the 37,800 – 38,000 area we mentioned. The index looks consolidating inside the area now and looking to bounce from it. No breakout confirmation yet from the range, the index might continue to consolidate and eventually break. If the index continues moving lower then it will target a level around 37,000 and the daily SMA 200. Traders could use the current area and the lower support levels for a chance to add long positions in stocks.

Union Pacific (UNP)

UNP share prices are trading lower and reached the daily SMA 200. The situation is bearish but a temporary bullish bounce could happen. However, traders might want to stay cautious when entering long positions. When the share prices stabilize near the daily SMA 200, traders could start adding more long positions aggressively. On the lower side, $220.00 – $225.00 might be the area to watch for a bearish overshoot.