Stocks, Indices futures and Oil have opened on a positive note for the week due to the optimism of vaccine announcements made last week by the pharmaceutical company Pfizer and AstraZeneca. For the year, markets are back to the levels of February and it has reversed correction of more than 30 to 40% across major global indices.
Markets could be choppy for the upcoming few months. Even though it has reversed and crossed its yearly high, it might show high volatility on both sides. All-time high cases of Covid-19 that are continuing to rise are affecting key economic indicators like German PMI, French business activity, EU PMI and US retail sales data.
Dow jones 30 is trading sideways. Technically, there is no structured trend. On a weekly basis, RSI is showing a diversion, and suggests the recent V shaped recovery might not sustain in the near future. It has tested a psychological level of 30000 for twice in the previous two weeks but failed to hold or cross the level. If it fails to cross the resistance level of 30000, it might go back to 28000 in the coming days. On the other hand, above 30000 the next Fibonacci level is at 34000.
US Tech Index
Meanwhile, Nasdaq 100 has rallied more than 80% since its last correction in the month of March-2020. The global pandemic has helped all the defensive sectors like IT and Pharmaceutical companies to hit its lifetime high. In the last 3 months Nasdaq is moving in the same range between 11000 and 12500. Any upside break above 12500 might lead the index to a new high of above 13000 and 13500. However, any positive news of a COVID-19 vaccination might ignite a sharp correction and index might fall down to the level of 10500.
Gold is trading in a structured bull run. The global pandemic has helped the prices to cross the 2000 level, but it has failed to hold or sustain the rally due to the optimism of a Covid-19 vaccine and resumed economic activity across the world. With the ongoing uncertainty over the vaccine and economic stimulus package by the central government, gold might move sideways. Any correction in the price might be a buying opportunity for the long term investors.
Technically, 1950 level is a strong resistance and on the downside 1850 is the first support area. If it breaks 1800, the next major support is at 78.6% Fibonacci level of 1735.
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