. Weekly Index Analysis - China exports, Wall Street tensions, indices react.

Weekly Index Analysis – China exports, Wall Street tensions, indices react.

Weekly Index Analysis – China exports, Wall Street tensions, indices react.

13 Jan 2024

Introduction:

In the global indices landscape, Asian markets face a downturn with China’s annual exports decline, contrasting Japan’s record rally. European shares also dipped, impacted by robust U.S. inflation data affecting rate cut expectations. Additionally, Wall Street shifted focus to struggling U.S. energy stocks amid rising geopolitical tensions in the Red Sea, sparking optimism for a potential rebound driven by upcoming earnings reports.

Market In Focus for the Next Week – Dow Jones

On Friday, the Dow Jones Industrial Average fell as Wall Street responded to a fresh set of inflation data.

TECHNICAL OVERVIEW:

Moving Averages:

Exponential:

  • MA 5: 37796.13 | Negative Crossover | Bearish
  • MA 20: 37824.00 | Positive Crossover | Bearish
  • MA 50: 36528.98 | Positive Crossover | Bullish

Simple:

  • MA 5: 37815.05 | Negative Crossover | Bearish
  • MA 20: 37824.00| Positive Crossover | Bearish
  • MA 50: 36528.98 | Positive Crossover | Bullish

RSI (Relative Strength Index): 60.06| Buy Zone| Bullish

Stochastic Oscillator: 5.96|Sell Zone | Negative

Resistance And Support Levels:

  • R1: 38742.95 | R2: 38742.95
  • S1: 37377.16| S2: 36476.99

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Buy Limit: 37346.12 | Take Profit: 38137.66| Stop Loss: 36864.99.

S&P 500:

The S&P 500 declined after a brief surge above its previous record close, influenced by CPI data.

TECHNICAL OVERVIEW:

Moving Averages:

Exponential:

  • MA 5: 4804.57 | Positive Crossover | Bullish
  • MA 20: 4793.22 | Positive Crossover | Bullish
  • MA 50: 4655.42 | Positive Crossover | Bullish

Simple:

  • MA 5: 4808.69 | Positive Crossover | Bullish
  • MA 20: 4793.22| Positive Crossover | Bullish
  • MA 50: 4655.42 | Positive Crossover | Bullish

RSI (Relative Strength Index): 63.61| Buy Zone| Bullish

Stochastic Oscillator: 43.97|Neutral Zone | Neutral

Resistance And Support Levels:

  • R1: 4840.77 | R2: 4954.47
  • S1: 4694.06| S2: 4551.01

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion:  Buy Limit: 4694.06 | Take Profit: 4840.77| Stop Loss: 4598.69.

FTSE 100:

On Friday, the FTSE 100 concluded with gains as a surge in commodity-linked stocks counteracted losses in the luxury group Burberry. However, lingering uncertainty regarding the prospects of interest rate cuts led to weekly declines in the main UK stock indexes.

TECHNICAL OVERVIEW:

Moving Averages:

Exponential:

  • MA 5: 7655.34 | Negative Crossover | Bearish
  • MA 20: 7682.59 | Negative Crossover | Bearish
  • MA 50: 7553.84 | Positive Crossover | Bullish

Simple:

  • MA 5: 7655.51 | Negative Crossover | Bearish
  • MA 20: 7682.73| Negative Crossover | Bearish
  • MA 50: 7553.07 | Positive Crossover | Bullish

RSI (Relative Strength Index): 49.74| Buy Zone| Bullish

Stochastic Oscillator: 5.43|SellZone | Negative

Resistance And Support Levels:

  • R1: 7713.3 | R2: 7905.1
  • S1: 7581.7| S2: 7442.6

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion:  Stop Sell: 7561.1 | Take Profit: 7378.9| Stop Loss: 7691.9.

DAX 40:

European shares receive a boost from positive UK GDP and a favorable outlook on US inflation, propelling the DAX Index.

TECHNICAL OVERVIEW:

Moving Averages:

Exponential:

  • MA 5: 16817.52 | Negative Crossover | Bearish
  • MA 20: 16863.62 | Positive Crossover | Bullish
  • MA 50: 16336.09 | Positive Crossover | Bullish

Simple:

  • MA 5: 16837.06 | Negative Crossover | Bearish
  • MA 20: 16863.65| Positive Crossover | Bullish
  • MA 50: 16336.34 | Positive Crossover | Bullish

RSI (Relative Strength Index): 57.06| Buy Zone| Bullish

Stochastic Oscillator: 20.03|Sell Zone | Neutral

Resistance And Support Levels:

  • R1: 16991.1 | R2: 17333.5
  • S1: 16550.9| S2: 16196.3

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion:  Buy Limit: 16563.2 | Take Profit: 16991.1| Stop Loss: 16281.9

Elsewhere in the Indices Market

Asian markets declined due to China’s annual exports decrease, but Japan bucks the trend by extending its record rally.

The Shanghai composite is down at 0.16%. Overall, the Singapore MSCI is down 0.67% to 279.62. Over in Hong Kong, the Hang Seng Index is down by 0.35% to 16,244.58. In Japan, the Nikkei 225 was up 1.50% to 35,577.11, while the Topix index was up 0.46% to 2,494.23. South Korea’s Kospi down 0.60% to 2,5525.05. Australia S&P/ASX 200 is down 0.10% to, 7,498.30.

European shares decline as robust U.S. inflation data dashes hopes for a rate cut.

The DAX futures contract in Germany traded 0.95% higher, CAC 40 futures in France up 1.05% to 7,465.14 and the UK 100 futures contract in the U.K. up 0.64% to 7,624.93.

Wall St Week Ahead Red Sea tensions put focus on struggling U.S. energy stocks.

The recent surge that lifted almost every sector of the U.S. stock market has neglected energy shares. Optimistic investors are wagering on potential rebounds for the lagging group, driven by anticipated earnings reports and increasing geopolitical tensions.

Indexes: Dow down 0.49%, S&P up 0.08%, Nasdaq up 0.02%.

Corporate News:

Tesla (TSLA) is down 3.67% at 218.89, Apple (AAPL) is up 0.18% at 185.92, and Morgan Stanley (MS) is down 0.89% at 89.70. JPMorgan Chase & Co (JPM) is down 0.73% at 169.05, and Goldman Sachs Group Inc, (GS) is down 0.53% at 377.75.

Key Economic Events & Data Release for Upcoming Week:

(EUR)Industrial Production (MoM) (Nov) (Monday)

(CAD)Manufacturing Sales(Monday)

(EUR) German CPI (MoM) (Dec) (Tuesday)

(CAD) Core CPI (MoM) (Dec) (Tuesday)

(CNY) Industrial Production (YoY) (Dec) (Wednesday)

(CNY) GDP (QoQ) (Q4) (Wednesday)

(GBP) CPI (YoY) (Dec) (Wednesday)

(EUR) CPI (YoY) (Dec) (Wednesday)

(USD) Retail Sales (MoM) (Dec) (Wednesday)

(USD) Core Retail Sales (MoM) (Dec)

(AUD) Employment Change (Dec) (Thursday)