Ill Omen
- Lack of positive catalysts have taken toll on JCI as the index slipped through one of key support areas. This cast an ill omen for the coming week as technically the outlook has turned negative.
- Individual performance of stocks will find cues from the continued releases of earnings.
- Expectations of Fed tapering seems to be taking a backseat for now. For now, there is no strong case for a tapering to start this year. Most likely after another budget debate early next year.
Manufacturing Improved
- China’s manufacturing PMI ticked up in October to 51.4, up from 51.1 in September, better than the expected 51.2; meanwhile measure from HSBC/Markit also showed improvement, from 50.2 to 50.9, better than the consensus of 50.7.
- Similarly, US ISM index for manufacturing also inched higher from 56.2 to 56.4, better than the expected 55.0.
Technically Speaking...
- JCI slipped back below its EMA band at 4,470, setting a grim outlook for the coming week.
- The loss of the EMA support at 4,470 had switched its role back to resistance. Key support now lies at 4,313/4,314, followed by 4,207.
- Outlook turned negative as the price slipped below 4,470, while the MACD has slipped below the zero line.
- No changes in the pool of recommendations for now. All are on hold.
Week Ahead
The delayed non-farm payrolls for October is set to be released next Friday. The reading may receive a mixed response as the data maybe skewed by the effect of recent shutdown. Domestically, earnings season will continue to set individual path of related stocks.
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