Doldrums
- Market continues to move back and forth between gains and losses as fresh catalysts remain absent. At the moment the gains and losses hinge on the Fed speculation over tapering and the impacts from releases of several not-so-significant-data.
- Domestically, earnings season will be stealing the market attention in the absence of key global issues and data.
Confidence Slipped in October
- Consumer confidence fell in October from 77.5 to 73.2, a 10-month low, below the consensus of 75 and lower than its preliminary reading of 75.2.
- US durable goods orders climbed 3.7% in September, beating the consensus of a 2.3% rise and way faster than prior month’s slight gains of 0.2%. Excluding transportation items however, the orders fell 0.1%, better than prior period’s decline of 0.4% but sharply below the expected rise of 0.5%.
Technically Speaking...
- Despite declining on Friday, JCI managed to eke out an 0.8% gains throughout the week. The index however, remains resilient above its daily and weekly EMA bands.
- Recent high at 4,609 will act as near-term resistance, followed by 4,791 and 4,900 while the nearest support will be at the upper end of the EMA band at 4,550, followed by recent low at 4,499.
- Daily indicators hinted at exhaustion as volume slipped along with declining MACD and RSI. On the weekly basis however, the volume has started to tick up, while MACD’s ascend accelerated. Overall, the outlook for the coming week is cautiously positive.
- No changes in the pool of recommendations for now. All are on hold.
Week Ahead
Falling consumer confidence added more relief on the investors’ mind that the Fed will not taper the stimulus soon. Technically, JCI remains positive, but as positive catalysts look limited, the climb will be a grind rather than a rally. Earnings season domestic and overseas will also continue to feature in the coming week.
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