NASDAQ Extended Gains Ahead of Tariff Announcement
By: Eddy Peng Mar 9, 2018
U.S. equity markets extended gains ahead of the announcement, as the Associated Press gave key details. The benchmark Nasdaq 100 index added 0.72 percent and settled at 6971.2, having a fifth straight day on growth.
U.S. President Donald Trump set steel and aluminium tariffs on 25 percent and 10 percent respectively on Thursday in line of market’s expectation, but exempted Canada and Mexico to give ground in sperate talks on the North American Free Trade Agreement (NAFTA), backtracking from earlier pledges of tariffs on all countries.
Other countries which keep earning a lot from U.S. on trade like China and Korea, however, will be tremendously affected by the tariffs. And also some industries relied on steel and aluminium will be involved.
Trump has also demanded concessions from the European Union, complaining that it treated American cars unfairly and has threatened to hike tariffs on auto imports from Europe.
Technically the Nasdaq 100 index has been rallying near the record high level even though there was a crash on early February, which also means it is in face of a major resistance ahead found on Jan. 29’s high of 7031.1.
With the Stochastic Oscillator applied on the daily chart, it has been surging above 80, meaning that it is located on overbought area, signalling a potential selloff force will occur. Here is a place where investors should be more cautious of, awaiting which direction it will head to after testing the major resistance ahead.
Chart 1: NAS100 Daily
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