The stock market is prime for a bearish correction

The bullish pressure in the stock market seems losing steam in January and a bearish correction is due. The stock market might start moving lower as traders and investors assess the fourth-quarter earnings report. We think the bullish trend will resume after the earnings release also the Fed rate cut which might happen as early as March this year.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index made two bearish closes on the daily chart which could confirm the start of a bearish correction. On the lower side, the index might target the daily SMA 100. Traders will expect the bullish trend to continue and wait for bullish reactions near the level. When there are bullish reactions, traders could enter long positions targeting a new higher high.

HP Incorporation (HPQ)

HPQ share prices have climbed above the daily SMA 200 and returned to their bullish trend. At the current time, the share prices undergo bearish correction and reached the cluster of averages. Traders could monitor the reactions near the averages for bullish reactions. When there is bullish reactions, traders could enter long positions expecting the continuation of the bullish trend.