US Stock Market Technical Analysis | August 11, 2022

Stock futures gain as the market building optimism after inflation data

The stock market is set to open higher today as DJIA futures trade upward above 100 points. Traders and investors turned optimistic after the inflation numbers came out lower than expected. It seems the market thinks that inflation numbers will continue to cool down and the Fed will slow down on its rate-hike program.

Despite the situation, inflation numbers continue to stay at high levels and a bounce in the rate will once again trigger bearish sentiment.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index launched upward yesterday after the release of inflation data. We have a higher high and close above the resistance area. However, the index needs more bullish confirmation above the area to continue upward to target the daily SMA 200. If the index closes lower inside the area at the end of the week then we might see the bearish scenario play out next week.

Analog Devices (ADI)

ADI share prices have broken out above the daily SMA 200 which confirms the switch to the bullish trend. If the share prices start a bearish correction and retest the daily SMA 200 then traders could enter long positions near the averages. Under the current situation, traders will avoid short positions until a major bearish close below the daily SMA 200 happens.

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