Dow Jones Index Technical Analysis & Market Update – 16 December 2022
16 Dec 2022
As recession fears increase, the Dow has its worst day in three months and drops more than 700 points
Stocks fell sharply Thursday after new data showed retail sales declined more than expected in November, raising fears that the Federal Reserve’s relentless interest rate hikes are tipping the economy into a recession.
The Dow Jones Industrial Average fell 764.13 points
The sell-off was broad-based with only 14 stocks in the S&P 500 trading in positive territory. Mega-cap tech stocks declined, with shares of Apple and Alphabet down more than 4%, while Amazon and Microsoft were lower by more than 3%. Shares of Netflix fell 8.6% following a Digi day report that said the streaming firm is offering to return money to advertisers after missing viewership targets.
The disappointing retail sales report suggested inflation is taking a toll on consumers. Retail sales fell 0.6% in November, according to the Commerce Department. That was a bigger loss than the Dow Jones estimate of a 0.3% decline.
The selling began Wednesday in the wake of the Fed’s latest boost in its overnight borrowing rate. The central bank also said it will continue hiking rates through 2023 and projected its fed funds rate to peak at a higher-than-expected 5.1%. With Wednesday’s half-a-percentage point hike, the targeted range for rates is currently 4.25% to 4.5%, the highest in 15 years.
“The equity market’s reaction is now factoring in a recession, and rejecting the possibility of the ‘soft/softish’ landing mentioned recently by Powell at the [Brookings Institution],” Quincy Krosby, chief global strategist at LPL Financial, wrote Thursday.
DOW JONES TECHNICAL ANALYSIS
Dow Jones is currently trading in up channel.
Dow Jones is currently trading Below all SMA
RSI is in buying zone which suggests bullishness and Stochastic is suggesting downtrend.
Dow Jones immediate resistance is at 33486 & its immediate support level is 33015
HOW TO TRADE DOW JONES INDEX IN THIS WEEK
Dow Jones is moving in up channel, but it has formed reversal pattern as we can see if it continues the current to swing a downside is possible.