U.S. stock market ready for bearish correction?

New record highs continue to print in the U.S. stock indices and the trend will continue this year as the Fed rate cut has not happened yet. However, this week we might see a bearish correction as the DJIA futures currently trading lower than 104 points before the market opens. Traders will expect less volatility this week as the trading week is shortened by the “Good Friday” holiday. Nevertheless, if the stock market starts a bearish pullback then traders could use the bearish movement as a chance to add more long positions.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index made a bearish close at the end of the week with moderate momentum. At the current time, the DJIA futures continue trading lower and might indicate the start of a bearish correction. On the lower side, there is a horizontal broken resistance level of around 39,200. Traders will observe the index reactions near the level for bullish reactions. When there are bullish reactions, traders could add more long positions in stocks. However, if the bearish pullback continues deeper, then 39,000 and daily SMA 50 will become the bearish target.

Hasbro Inc (HAS)

HAS share prices start moving upward and printing new higher highs also higher lows. The share prices managed to reach the daily SMA 200 and will test it for now. Traders will expect a bearish correction toward the level around $52.50. If a bearish movement toward the level happens and a bullish bounce happens then traders will expect another test on the daily SMA 200. When the share prices breakout above the daily SMA 200 then the bullish trend could continue. (Note: a bearish correction toward $52.50 is not mandatory as the share prices could just continue moving upward without any correction)