Dow Jones Industrial Average (.DJI) Surges to Two-Month High as Earnings Season Keeps on Giving

Dow Jones Industrial Average (.DJI) Surges to Two-Month High as Earnings Season Keeps on Giving

Dow Jones Industrial Average (.DJI) Surges to Two-Month High as Earnings Season Keeps on Giving

Led by the Dow Jones Industrial Average, the U.S. stock market traded sharply higher on Tuesday after a fresh batch of earnings surprised to the upside, underscoring another solid quarter for corporate America.

DOW RECORDS STRONG GAINS

All of Wall Street’s major indexes booked solid gains through the morning session, mirroring a strong pre-market for U.S. stock futures. The Dow Jones Industrial Average rose 174 points, or 0.7%, to 25,413.73. The blue-chip index is on track for its highest settlement in two months. DowDuPont (DWDP), Intel Corp (INTC), and Apple Inc. (AAPL) were the Dow’s best performers, gaining at least 2% each.

The large-cap S&P 500 Index rose 0.5% to 2,737.70. Shares of Estee Lauder Companies Inc. (EL) and Ralph Lauren Corp (RL) led the broad index higher after reporting upbeat earnings for the December quarter. At the time of writing, both companies were up double-digits. The S&P 500’s consumer discretionary index rose 1%.

The Nasdaq Composite Index was on track for another solid trading session, having gained 0.8% to 7,406.75.

As of Friday, 46% of S&P 500 companies had reported fourth-quarter results. Among them, more than two-thirds (70%) reported better than expected earnings and 62% posted positive revenue surprises, according to FactSet.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 26,483.35.

The projected lower bound is: 24,377.52.

The projected closing price is: 25,430.44.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 6 rising windows in the last 50 candles–this makes the current rising window even more bullish.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 93.5043. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 67.76. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 27 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 153.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 23 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 172.150 at 25,411.520. Volume was 14% below average (neutral) and Bollinger Bands were 17% narrower than normal.

Open High Low Close Volume___
25,287.93025,427.32025,287.65025,411.520 310,652,352

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 24,870.36 24,194.34 24,991.19
Volatility: 12 28 20
Volume: 357,965,536 369,627,712 329,309,024

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

DJ INDU AVERG gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
DJ INDU AVERG is currently 1.7% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume into .DJI (mildly bullish). Our trend forecasting oscillators are currently bullish on .DJI and have had this outlook for the last 16 periods.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

You must be logged in to post comments :  
CONNECT WITH