U.S stock Market Rallies After Inflation Data

Rising inflation numbers but lower core CPI has been good news for the market. The stock market started a rally after the December dip. It seems the bullish sentiment might continue until the end of the month when the Fed will announce interest rates. If inflation numbers stay within expectation or move lower and the treasury yield starts falling, then the stock market could rally to a new record high.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index bounced from the 50% Fibonacci Retracement level with strong bullish momentum. It seems the market is set on continuing the bullish trend to target a new higher swing high. The index avoids a bearish continuation toward the daily SMA 200 but it needs to print a new swing high to confirm the bullish continuation. If the index turns lower again from the current level then there is a chance of continuation toward the daily SMA 200.

Illinois tool Works Inc(ITW)

ITW share prices are trading inside a bullish channel where it respects both the upper and lower channels in each test. At the current time, the share prices have not reached the bottom of the channel but already staged a rally. It returns above the daily SMA 200 and might be supported by the averages. If the share prices could maintain the bullish pressure then traders could expect a bullish continuation. On the other hand, the share prices might attempt to continue the bearish movement to target the bottom of the channel. Under the current situation, traders could enter long positions whenever the share prices enter the $240.00 – $250.00 area.