Stock futures bullish on the bet that the worse has been over

The worse might be over in the U.S. banking sectors. DJIA futures are currently up more than 200 points which suggests a further recovery in the index. Aside from the sentiment, traders also preparing for the earnings season which might give a further boost to sentiment. Despite the situation, traders might want to stay cautious as the current situation could change drastically.

Technical Analysis

Dow Jones Industrial Average (INDU)

The movement of the DJIA index turned positive for now and might target the top trendline. However, traders will stay cautious as the index has not climbed above the daily SMA 200. If the index gets rejected from the averages with strong bearish reactions then we might see a continuation of the bearish trend and a new lower high. Will the fundamental situation support the stock market and bring the index up to breakout above the trendline?

Royal Caribbean (RCL)

RCL share prices is at an interesting level near the daily SMA 200 and the bottom trendline. If the share prices could bounce with strong bullish reactions then the bullish trend could continue. Traders could use the area between the averages to enter long positions with stops below the previous swing low. On the upside, if the bullish trend is confirmed then we will expect a new higher high.