Dow Jones In A Make or Break Point

The Dow Jones futures point to a positive opening extending yesterday’s gains on stronger retail sales and positive results from a coronavirus treatment. Speculation for a $1 trillion infrastructure package from Trump administration also boosts equities.

On the economic data front, the United States Building Permits reported earlier at 1.22M below the expectations of 1.228M in May. The Building Permits Change came in at 14.4% while the previous reading was at -20.8%. The U.S. Housing Starts came in at 0.974M below the expectations of 1.095M in May; the Housing Starts Change came in at 4.3%, well improved from the previous -30.2%.

Caterpillar was among the leaders in yesterday’s session on the news for an infrastructure package; the stock ended yesterday 5.26% higher at 130.11. Boeing was 3.58% higher at 197.77; Apple finished 2.65% higher at 352.08 after Apple announced that it would reopen ten stores in New York this week for the first time since the Covid-19 lockdown.

Dow Jones futures are 0.28% higher at 26,265. The S&P 500 futures are 0.35% higher at 3,129, while Nasdaq futures are 0.52% higher at 10,011.

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Dow Jones Analysis

Dow Jones ended at 26,290 just below the 200-day moving average after a break above in the midday. If the index manages to close today above the 20-day moving average, we might see another leg higher. The technical picture is positive now, but bulls need confirmation with a credible break above the 200-day SMA. 

On the upside, first resistance for the Dow Jones stands at 26,594 the high from yesterday. A move above 26,594 might open the way for a test of 27,328 the high from June 10. If the bulls continue then the next hurdle for the Dow Jones futures is at 27,581 the high from June 8. 

On the other hand, immediate support for Dow Jones index is at 25,820 the low from yesterday. Next support for the Dow Jones will be met at 25,020 the 100-day moving average. A break below 25,020 might open the way for a test of 24,606 the 50-day moving average.  

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