US Stock Market Technical Analysis | October 04, 2022

Stock futures trade up sharply as traders attempt to extend Monday’s rally

The stock market is set to continue the bullish sentiment after yesterday’s major bullish close. It seems the bearish pressure will stop for now and the stock market will undergo a bullish correction in October. However, traders will prepare for further weakness when the Fed comes back under focus again on the interest rate.

We think the Fed might tighten again this year and trigger bearish sentiment. However, we might not see further rate-hike as it is practically not feasible with massive debt piling.

Technical Analysis

Dow Jones Industrial Average (INDU)

A major bullish reaction happened in the DJIA index yesterday which might become a confirmation of a bullish rally. The index futures are higher by more than 400 points today which indicates a strong bullish opening. We might see the index testing 30,000 handles this week with 30,500 – 31,250 as the next upward target.

The overall trend is bearish which means traders will wait for exhaustion in the current bullish leg to enter short positions.

Yelp Inc (YELP)

YEL share prices have returned above the daily SMA 200 and keep maintaining the positions above the averages. If the share prices could bounce with strong bullish reactions then we might see a new bullish leg. Traders will place the stop level below the daily SMA 100 in case the trend turns bearish again.

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