Stock futures under bearish pressure after inflation data

The latest inflation data shrouds the market with bearish sentiment as inflation numbers continue to persist at a higher levels. Traders and investors concern on the Fed comment which suggest tightening might continue depend on the inflation data and future outlook. The bearish situation might continue until the end of month, however, we think the market might turn bullish after the release of earnings results from the companies. Despite the situation, traders could treat a bearish correction as chance to enter more long positions this year.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index got rejected from the top trendline and currently undergoes bearish pressure at the daily SMA 50. The consolidation between the daily SMA 50 and the top trendline might continue and traders will observe the index reactions. If the index continues moving lower then it could target the daily SMA 100 & 200. On the other hand, if a bullish breakout happens then we will see a new bullish leg to print a new higher high.

Under Armour (UA)

UA share prices broke above the cluster of averages and continue to extend the bullish movement. At the current time, the share prices undergo bearish correction toward the cluster of averages and will attempt to bounce from it. If the share prices could bounce from the cluster of averages then traders could enter long positions with a target of a new higher high or the close of the gap which happened in May last year.