Dow Still Favorable for Call Options, FTSE100 Remains Negative
Aug, 17th 04:54
US stocks closed with limited gains on Friday, with the Dow Jones Industrial Average closing up 0.40% at 17,477.40.
On weekly basis, the DJIA managed to add 0.6%, despite all the wild moves triggered by China’s Central Bank decision on devaluing its currency earlier in the week.
Nevertheless, the longer term bearish tone prevails, as in the daily chart, the index remains well below a bearish 20 SMA, whilst the technical indicators remain well below their mid-lines, albeit they have lost partially their downward strength, due to Friday’s recovery.
In the shorter term, the index stands above a mild bearish 20 SMA, whilst the technical indicators head higher above their mid-lines supporting some intraday advances.
Sentiment towards the US indexes, however, remains bearish, and despite investors are not yet clearly selling on spikes, this scenario may become likely soon, should the US data reinforce the idea of a US rate hike next September.
Meanwhile the FTSE 100 closed at 6,550.74, down 0.27%, on Friday, and not far from the weekly low of 6,535 achieved on Wednesday.
The index however, closed the week with strong losses, amid Chinese intervention in the Yuan, although fears eased partially by the end of the week, something that may attract buying interest particularly with the index at current lows.
Among the FTSE biggest winners was the travel firm Tui Group that surged 6.6% after announcing its annual profits were set to come in at the top end of expectations. Technically, the daily chart shows that the index remains well below a bearish 20 SMA, whilst the Momentum indicator heads slightly higher above the 100 level, but the RSI indicator remains in negative territory, around 41.
In the 4 hours chart, the 20 SMA maintains a strong bearish slope above the current level, whilst the technical indicators have bounced from oversold levels, but are losing their upward potential below their mid-lines, suggesting little buying interest around the FTSE at the time being.