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Dow Jones: Boeing and Gilead in focus, fear and greed index warning

Dow Jones futures
Dow Jones

The Dow Jones rose by more than 130 points in the premarket as traders reflected on positive news from constituent companies. The index is trading at $25,220, which is the highest it has been since Friday. Also, the blue-chip index is still having the best quarter in decades. It is up by more than 16% in the past three months.

Judgement day for Boeing

Boeing is the best-performing stock in the Dow Jones in premarket trading. The stock is up by more than 7.2% as traders wait for the testing results of 737-Max plane. The Federal Aviation Authority (FAA) will take to the skies today and tomorrow as it attempts to recertify the plane. Analysts expect that the authorities will accept the changes made by Boeing.

The problems with Max started a year ago when its MCAS system failed twice leading to more than 400 deaths. As a result, many airlines decided to halt the plane as the company worked to fix the system.

The recertification matters because the plane is Boeing’s best-seller. More than 4,000 planes worth billions of dollars have been ordered.

Gilead share price jump as remdesivir pricing released

Gilead share price rose after the company released the much-anticipated pricing schedule of remdesivir drug. The company said that it will price the drug at $390 per vial, meaning that patients will pay more than $2,340. Those in the developed world will pay significantly lower amount for the generic version. In the statement, Gilead’s CEO said that the pricing was below what the market was expecting. It also expects it to be reasonable to patients. Gilead is a leading component of the Dow Jones.

Fear and greed index points to fear

The Dow Jones is cautiously higher at a time when investors are increasingly fearful about the market. A good tool to measure this is the fear and greed index, which was developed by CNN Money. The index is now at 38, which is a sign that investors are fearful of the market. This is evidenced by key metrics of the index like junk bond demand, safe haven demand, market momentum, and market volatility.  Stock price strength is in neutral while put and call options are still in greed.

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Dow Jones technical analysis

The Dow Jones is trading at $25,295. On the daily chart, the price is along the 61.8% Fibonacci retracement level. Interestingly, it is along the 50-day and 100-day exponential moving averages. Another interesting fact is that the current price is along the ascending trend line, which is drawn by connecting the lowest points on April 2, May 14, and June 26. As such, a move above the 61.8% retracement at $25,345 will see the Dow Jones continue rising. It will mean that there are more buyers in the market.

On the other hand, a move below today’s low of $24,882 will invalidate the bullish thesis. That is because it will signal that there are more sellers in the market.

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