US Stock market Technical Analysis July 10, 2018

A break to trade fear as earnings take place

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U.S stock market pointed to small gain following the 320 points bounce on Monday. Trade fears take a backseat while traders and investors are waiting for the release of quarterly reports from companies. Earlier Pepsico (NYSE: PEP) reported better than expected earnings, share prices up as high as 3.3% in pre-market trading. The company reported earnings per share of $1.61 vs. $1.52 expectation. Revenue comes out at $16.09 billion vs. $16.12 billion expectation.

Aside from the U.S, Brexit took center stage as there is the possibility of “No Deal” between EU-27 and UK. No Deal will impact negatively to the UK economy as penalties and trade seclusion between both parties will take place.

Asian & European Stock market

Asian stock market edge higher. Nikkei closed up 144.71 points (+0.66%) to 22,196.89, Shang Hai Composite closed up 12.33 points (+0.44%) to 2,827.44 and Australia ASX 200 down 27.90 points (-0.44%) to 6,258.10. European stock climbed today. DAX Germany up 0.63%, FTSE UK up 0.16%, and Euro STOXX 600 up 0.50%.

Technical Analysis

Dow Jones Industrial Average (INDU)

No change to the outlook in Dow Jones Industrial Averages which is moving between daily SMA 200 and trendline. Currently, the index moves higher after the bounce from SMA 200. We expect a test of trendline on the card and might happen this week.

Caterpillar Inc (CAT)

CAT fell below its daily SMA 200 and stage a bullish correction at the current time. The share prices could move up and test daily SMA 200 where traders will look for a short position. No reason to look for a long position as the price fall below SMA 200 and enter a bearish scenario.

Coca-Cola Co (KO)

Failed supply test in the past will weight on the share prices. Monday and Tuesday, KO formed bearish candlestick and showed an initial sign of rejection from the daily SMA 200. The downward movement might gain momentum in coming days. As long as the share prices stay below SMA 200, it is safe to take a short position in KO.

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