US Stock market Technical Analysis March 26, 2020

Death cat bounce to restart the bearish pressure

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Stimulus deal is positive for the stock market however it is a temporary solution only. As long as covid-19 uncontained, the stock market will continue its downward movement. We could regard the current bullish movement as a dead cat bounce move. It will immediately shift to bearish trend again once the reality kick-in.

On the economic ground, traders and investors are waiting for jobless claim data. Expect a surge in the jobless claim which will spread more bearish sentiment in the market.

Asian & European Stock market

The Asian stock market traded lower today. Japan’s stock market down 882.03 points (-4.51%) to 18,664.60, China stock market down 16.68 points (-0.60%) to 2,764.91 and Australia ASX 200 up 115.20 points (+2.30%) to 5,113.30. The European stock market also on traded lower. DAX Germany down 1.96%, UK FTSE down 1.47%, Euro STOXX600 down 1.37%

Technical Analysis

Dow Jones Industrial Average (INDU)

There is further bullish pressure in the index yesterday. However, the bullish pressure losing ground and the index closed not far from its opening level. Today, DJIA futures lower 141 points before the market open. If there is no bullish follow-through then we might see a further bearish continuation in the stock market.

Pepsico Inc (PEP)

PEP’s long-term bullish trend is under a test this month. The share prices tested the bottom trendline and $100.00 handle. At the current time, it manages to bounce from both support levels. However, the bearish trend in the global market expected to continue and PEP might be pushed lower toward the monthly SMA 200.

Traders could prepare for the bearish move and enter long positions near the averages.

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