US Stock market Technical Analysis October 19, 2018

DJIA set to rebound after Thursday 300+ points drop

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U.S stock market ready to set the day green as Dow Jones Industrial Averages futures pointed upward more than 130 points. It is a common reaction after Thursday 300+ points drop. From Asian market, China released weakest quarterly GDP growth since 2009, the country’s GDP grew 6.5% compared to 6.6% expectation.

On the European market, Italy’s budget drawing concern as the country must respond to Eurozone commision deadline on Monday regarding its controversial budget. Contrary to negative news on the market, it seems traders and investors in the U.S decided to ignore the situation and focus to earnings results.

Asian & European Stock market

Asian stock market finished the week lower. Nikkei down 126.08 points (-0.56%) to 22,532.08, China stock market up 64.05 points (+2.58%) to 2,550.47, and Australia ASX 200 down 2.90 points (-0.05%) to 5,939.50. European stock market under pressure. DAX Germany down 0.24%, UK FTSE up 0.37%, Euro STOXX600 down 0.16%.

Technical Analysis

Dow Jones Industrial Average (INDU)

It could be a hard time for DJIA to bounce from SMA 200 and lift above 25,700 resistance. Even though the futures pointed upward, we think the index might stall between SMA 200 and 25,700. Earnings season so far could prevent the index moving lower, but trade tension and rising U.S dollar is a big threat.

Currently, the best options traders could take is to stay sideways and waiting for more hints.

Pepsico Inc (PEP)

PEP might finally decline as the share prices made reaction near SMA 200. The bearish reaction might indicate the continuation of the bearish trend after breakout below the averages. Traders could take a short position with a stop above daily SMA 200. $100.00 – $103.00 is the target area for the bearish move.

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