DJ 30 TARGETING MA5, FEDSPEAK THE KEY DRIVER
DJ 30 futures are currently trading at 23892- higher by 1.40% as compared to the previous close. The contract closed in positive territory in the last trading session also. Further back, the benchmark futures closed in the green in 5 out of the last 8 trading sessions.
Futures on major U.S. rose on Wednesday morning on hopes that the Federal Reserve will decide to slow the pace of its interest rate hike in next year. The decision will be announced today at 2 pm ET. The central bank is widely expected to raise its fed funds rate to a range of between 2.25% and 2.5% in its decision. The markets, however, expect the Fed to signal that it will slow the pace of further increases to the federal funds rate in 2019.
Shares were also supported Wednesday morning on news of a bipartisan Senate plan to avoid a government shutdown. Also. U.S. Treasury Secretary Steven Mnuchin’s statement that the U.S. and China will meet in January to broker a trade-war truce in an interview on Tuesday also lifted sentiments.
In the Cash Markets, the DJIA opened 50 points higher as gains in McDonald’s and Home Depot offset losses in American Express and Johnson & Johnson.
Index-member Pfizer rose 0.32% at the time of writing after a deal to combine its consumer health business with GlaxoSmithKline. Index-component J.P. Morgan Chase was up 0.78% at the time of writing.
Other top gainers in the Dow Jones include Caterpillar (up 3.2%), Visa (up 1.3%), and Boeing (up 1.1%) at the time of writing.
On the economic front, Existing Home Sales for November released earlier today came in at 5.32M. Home Sales were above the market expectation of 5.20M with Sales being 5.22M in the previous month.
On the technical front, the RSI is currently at 38.26% and suggests that the market can move in the upward direction. The current price is below the MA5 (23926). The current price is below the middle line of the Bollinger Bands but is heading upwards.
Overall Bias is Positive and Short-term trades can be initiated with tight Stop Loss and Take Profit targets.
Trade Suggestion-Limit Buy At 23870, Take Profit At 24000 Stop Loss At 23800