The Dow Jones Industrial Average closed above 40,000 on Friday for the first time in its 128-year history and investors are now looking for more topside returns in the coming weeks across US markets as this year’s bull run continues in earnest, assisted by a strong recent earnings season and anticipated interest rate cuts by the Federal Reserve. Whilst Friday’s headlines were about the Dow, many investors are keeping a close eye on the tech-heavy Nasdaq which has so far returned just over 11% on a year-to-date basis and had a 1-year increase of nearly 33%.
It is currently trading just below last week’s record high but more positive momentum could once again take it further north with the key psychological level of 20,000 the next potential target for bulls. Traders looking at technical levels to buy on dips on any pullback should find initial support in the coming days and weeks around the recent May 3 low at 17,800 and beyond that the daily trendline support is now around the 17,500 level.
There is little in the way of tier 1 US data due out this week, however, we do have a dearth of Federal Reserve Bank speakers scheduled and if they continue to confirm that the next move for the Fed is cut and that the market pricing is of at least two by the year-end is in line with their expectations, then expect US stock markets to remain bid in the week ahead.
Resistance 2 : 20,000 – Key psychological Level
Resistance 1 : 18,669 – Last weeks and all-time High
Support 1 : 17,800 – May 3 Low
Support 2 : 17,500 – Trendline Support
