US Stock market Technical Analysis November 6, 2018

Equity market to take a cue from the midterm election

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A crucial event took place today and the stock market looks will trade on cautious note today. Democrat expected to seize control of the House of representatives while Republic maintains a majority in Senate. The midterm election vote started in the evening and the influence on the stock market might be known on Wednesday.

If Democrats seize both controls on House and Senate then in the future it might impact president Trump legislative agenda. We could expect less aggressive infrastructure investment and fewer fiscal stimulus.

UK Brexit Deal

Looking ahead to the broad market, traders and investors also monitoring negotiation between UK Prime Minister Theresa May and European Union. UK Trade minister said to the market today, “It is impossible” to know whether a deal will be reached by the end of the year.

Asian & European Stock market

Asian stock market mostly positive. Nikkei up 248.76 points (+1.14%) to 22,147.75, China stock market down 6.07 points (-0.23%) to 2,659.36, and Australia ASX 200 up 57.10 points (+0.98%) to 5,875.20. European stock market headed lower. DAX Germany down 0.24%, UK FTSE down 0.90%, Euro STOXX600 down 0.36%.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA bounced from the daily SMA 200 and indicate a possible bullish continuation. However, today is high impact day where U.S citizen will go to vote for midterm election. Expect less volatility today followed by strong movement in the coming day. DJIA might trade between the daily SMA 100 and SMA 200 today.

Waters Corp (WAT)

WAT is traded at an interesting place where daily SMA 200 intersect with a bearish trendline. The share prices might have close above the trendline but stay below the averages. A sharp upward movement happened after the company released earnings in October. We might expect a breakout above SMA 200 is possible under current strong momentum. Traders could place long position either on a pullback or after breakout happen.

Other Watchlists

MA – The share prices traded near its daily SMA 200, will it bounce and start a new bullish trend?

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