Index in Focus: Dow Jones Industrial Average
According to our internal data, the Dow Jones Industrial Average (Dow) is our most widely traded stock index. Rather than trading individual a large cap stock, investors and traders can turn to the Dow Jones Industrial Average (the granddaddy of them all) to benefit from the top 30 most prominent companies on Wall Street. As there are only 30 stocks in the index, when news announcements or earnings are released, the index tends to move. However, the move for the index won’t be as large as the move in the individual stock itself. For example, Microsoft, McDonalds and Coca-Cola all released better than expected earnings either after Tuesday’s close or on Wednesday morning before the open. While the Dow opened marginally higher (0.02%), Microsoft opened nearly 2% higher (and is over 4.5% as of the time of this writing).
Prior to Tuesday, the Dow formed all-time new highs, and had closed higher than the previous day for 9 straight sessions. However, Tuesday’s shooting star candlestick signaled the Dow may pull back after the index gapped open higher on Wednesday. That is indeed what happened, as Wednesday’s candlestick formed a bearish engulfing pattern, in which the real body of Wednesday’s candle engulfed the real body of Tuesday’s candle. The Dow is currently trading below previous all-time highs from August 16th.
Source: Tradingview, Stone X
Trade the Dow Jones now: Login or Open a new account!
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
On a 240-minute timeframe, there is some intra-day horizontal support near 35,428. There is also horizontal support at 35,035.94, which confluences with the 38.2% Fibonacci retracement from the September 20th lows to October 27th highs. Below there opens a gap down to 34,934, and then the 50 Day Moving Average at 34,913. Resistance above is at the October 27th highs of 35,892.92, then the upward sloping trendline which dates to May 10th near 36,000 (see daily). Above there is the 127.2% Fibonacci extension from August 16th highs to the September 20th lows, near 36,172.78 (see daily).
Source: Tradingview, Stone X
Prior to Tuesday, the Dow Jones Industrial Average was up 9 sessions in a row. As earnings week came in full force, the stock index formed a shooting star and then a bearish engulfing pattern. One must wonder whether the run up into earnings was just a plain old “Buy the rumor, sell the fact”.
Learn more about index trading opportunities
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.
ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.
City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.
The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.
The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
© City Index 2024