Dow Jones, S&P 500 and Nasdaq Composite advanced as stimulus talks continue

Dow Jones, S&P 500 and Nasdaq Composite advanced as stimulus talks continue
Written by:
Stanko Iliev
11th October, 14:14
  • DJIA, SPX and Nasdaq advanced on a weekly basis
  • Hopes related to a US stimulus package boosted the market’s sentiment
  • The US President Trump proposed a $1.8 trillion stimulus package

The US stock market advanced this Friday supported by the fact that optimism over more federal fiscal aid grew. The US President Trump proposed a $1.8 trillion stimulus package that includes checks to individuals and an extension of the Paycheck Protection Program.  

S&P 500 and Nasdaq registered their biggest weekly percentage gains since July while the Dow Jones Industrial Average had its biggest weekly gain since August.

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S&P 500 up 3.8% on a weekly basis

S&P 500 (SPX) rose 3.8% this week which is the biggest weekly percentage gain since July. The market reacted well to Trump’s sudden turnaround in terms of a support package and the S&P 500 closed the week at 3,477 points.

Data source: tradingview.com

As long the price is above this trend line this index is in the “buy” zone and there is no indication of the trend reversal. If the price falls on the trend line and if we get a “bullish” confirmation candle it would be a very good entry point for short-term traders who are trading with “stop-loss” and “take profit” orders.

The trend line represents a very strong support level, if the price breaks this trend line it would be a very strong “sell” signal and we have an open way to 3,200 points ( this is also a strong support level). If the price jumps above 3,500 (short-term resistance level) that would be a confirmation of the “bullish” trend and open way to 3,550 or even 3,600 points.

DJIA up 3.3% on a weekly basis

For the week, The Dow Jones Industrial Average (DJIA) booked a 3.3% increase and closed at 28,586 points. It is important that this is the biggest weekly gain since August and for now, there is no signal for the trend reversal according to technical analysis.

Data source: tradingview.com

On this chart, I marked important resistance and support levels. The important support levels are 27,000 and 26,000 points, 29,000 and 30,000 points represent the resistance levels.

If the price jumps above 29,000 points it would be a buy signal for Dow Jones Industrial Average (DJIA) and we have the open way to 30,000 points.

Rising above 30,000 points supports the continuation of the bullish trend and the next price target could be located around 30,111. On the other side, if the price falls below 27,000 points it would be a “sell” signal and we have the open way to 26,000 points.

Nasdaq Composite up 4.6% on a weekly basis

For the week, the The Nasdaq Composite (COMP) booked a 4.6% growth and closed at 11,579 points. This is the biggest weekly percentage gain since July and the next target could be located around 11,800 points.

Data source: tradingview.com

The trend line on the chart above represents a very strong support level, if the price breaks this trend line it would be a very strong “sell” signal and we have an open way to 10,000 points ( this is also a strong support level).

As long the price is above this trend line and 10,000 points this index is in the “buy” zone and there is no indication of the trend reversal. If the price jumps above 12,000 resistance level that would be a confirmation of the “bullish” trend and open way to 12,200 or even 12,500 points.

Summary

Concerns about sluggish economic growth amid the ongoing pandemic continue to dominate the financial markets. Despite this, Dow Jones, S&P 500 and Nasdaq Composite advanced on a weekly basis and remain in a bull market. S&P 500 and Nasdaq registered their biggest weekly percentage gains since July while the Dow Jones Industrial Average had its biggest weekly gain since August.

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