U.S. stock markets extended to rise ahead of a historic summit on Tuesday between President Donald Trump and North Korea’s counterpart Kim Jong Un, with the U.S. drawing a firm line on what it will take for North Korea to receive sanctions relief. On Monday the S&P 500 was up 0.12 percent to close at 2782.1, approaching the session high since early March.
Investors stay in a positive attitude but still with some concerns about Kim-Trump talk, with Trump saying he feels “very good” about the upcoming summit in Singapore. After that, traders will switch their focus to the views of the world’s biggest central banks. The upcoming CPI data on Tuesday is estimated to set in 2.7 percent growth, urging the Federal Reserve to raise interest rates on Wednesday. This factor may undermine the upside momentum of the stock market.
The intraday price on the early trading session sees a little gain during the Kim-Trump Summit, likely pushing the index to break out the resistance hurdle near 2784.4, and the outcome of summit will be a big dominator of this technical breakout. A successful breakout will lead to a further rise and expose another key hurdle around Jan. 29’s high (2876.4).
However, a sign revealed by the Bollinger Bands may suggest that the index will retreat later as it already touched the upper band which can be seen as a resistance for rise. But that should be confirmed by the Relative Strength Index (RSI7), when the indictor’s fall back to below 70 will be a signal for a start over sell-off action.
Chart 1: S&P500 Daily
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