DOW JONES INCHES UP ON TRADE OPTIMISM; PMI DISAPPOINTS

DJ 30 futures are currently trading at 26806- higher by 0.23% as compared to the previous close. The contract closed in the positive territory in the last trading session also.

In the Cash Markets, the 30-stock index was up about 44 points at the time of writing. The benchmark index briefly rose above its record closing high of 26,828 earlier in the session.

The major stock indices advanced to their session highs after reports disclosed that Vice President Mike Pence would postpone a China policy address amid positive signs on trade. U.S. equities, however, erased their earlier gains after the Commerce Department barred five additional Chinese companies from buying U.S. components without approval.

Stocks of chipmakers dropped on the news. Apple, which relies on China for a large portion of revenue, added 0.28% at the time of writing.

Meanwhile, China and the U.S. would restart their trade talks at the G-20 summit in Osaka, Japan next week.

President Donald Trump said earlier today that he aborted a military strike on Iran in response to Teheran downing a U.S. drone, but the possibility of U.S. retaliation boosted the oil prices.

Index-member Caterpillar inched up 0.24% despite a rating downgrade at Atlantic Equities. The firm also lowered its price target on stocks of heavy equipment maker to $110 from $135.

Other top gainers in the Dow Jones include Walmart (up 1.45%), UnitedHealth Group (up 1.58%), and Exxon Mobil (up 0.76%) at the time of writing.

For the week, the 30-stock index is up more than 2%.

On the economic front, the preliminary reading of the Manufacturing PMI for June released earlier today fell to 50.1 from 50.5 in the previous month. It was the worst reading of the Manufacturing PMI since September 2009. The PMI reading was also below the market expectation of 50.5.

In addition, the preliminary reading of the Services PMI for June also out today dropped to 50.7 from 51.0 in the previous month. It was the worst reading of the Services PMI since March 2016. The PMI reading was also below the consensus estimates of 51.0.

On the technical front, the RSI is currently at 70.59% and suggests that the market can move in the upward direction. The current price is above the MA5. The current price is above the middle line of the Bollinger Bands and 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 26785 Take Profit At 26875 Stop Loss At 26740

 

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