US Stock market Technical Analysis May 14, 2018

The bulls seize control, but will it last?

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U.S stock market escaped the bearish trend in the previous week and snatched winning against the bear. The escape from the bearish trend invite the new question, will it last? We will outline several major things to watch this week.

North Korea announced the destruction of nuclear test site just before President Trump visit. Kim Jong Un and President Trump scheduled to meet in Singapore on 12 June.

China and U.S trade tension eased as President Trump said he and China’s president would help Chinese company ZTE to get back in business. Initially, the company receives sanction mid-April from U.S commerce department which forbid U.S company to sell component to ZTE. The sanction leads ZTE to cease all main business operation last week.

The situation is bullish for the stock market, but we will stay cautious as there is a possible major change in global policies which could lead global market sentiment sour.

Asian & European Stock market

Asian stock market mostly higher today. Nikkei closed up 107.38 points (+0.47%) to 22,865.86, Shang Hai Composite closed up 10.87 points (+0.34%) to 3,174.14 and Australia ASX 200 up 19.10 points (+0.31%) to 6,135.30. European stock market, on the other hand, took the lower path. DAX Germany down 0.24%, FTSE UK down 0.09%, and Euro STOXX 600 down 0.16%.

Technical Analysis

Dow Jones Industrial Average (INDU)

Dow Jones Industrial Averages break upside above the triangle consolidation on the daily chart and continue upward to test SMA 100. There is no reaction yet from the averages, and the index futures pointed upward at the current time. Will we see a breakout above the averages and continuation of the bullish trend?

Deere & Co (DE)

DE share prices escaped from the bearish channel and moved above daily SMA 200. It is possible the share prices could continue higher from the current level. We think there will be a test of daily SMA 200 before further upside. Traders could place long position near the averages with a tight stop order.

Goldman Sachs (GS)

GS is building a short setup near the daily SMA 200 where there is a flip of the price. It is a strong setup and traders only need one bearish momentum candlestick to push the price down. However, a sharp bullish move above daily SMA 200 is the worst scenario to happen, and traders suggested to close the position if that happens.

Other Watchlist

FCX – Mini bearish candlestick after the test on daily SMA 200, might turn the share prices lower.

LOW – Sharp bullish move above the daily SMA 200, might start a new bullish leg.

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