US Stock Indexes Analysis August 2020
Published on: August 19, 2020

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DOW closing lower

The Dow closed lower on Tuesday as a result of the declines in Home Depot and Walmart. They went down although they posted better-than-expected quarterly results. Additionally, investors seem to be taking a break, as they are awaiting to see if the Democrats and Republicans can make further progress on another COVID-19 stimulus package, while also monitoring the U.S. and China tensions.

U.S Home Construction

U.S. home construction posted a seasonally-adjusted annual rate of 1.496 million home starts in July, up 22.6% from Jun and up 23.4% from year-ago levels marking a strong turnaround from this year’s COVID-19 stricken slump. The high-range close sets the stage for a steady to to slightly lower opening when Wednesday’s night session begins trading. Stochastics indicator and RSI are found in overbought areas, but remain neutral to bullish signaling that range-bound to higher prices are possible near-term.

If the Dow extends this month’s rally, February’s high crossing at 29,568.57 is the next upside target. Closes below the 50-day moving average crossing at 26,517.59 would confirm that a short-term top has been posted. Initial resistance is the 87% retracement level of the February-March-decline crossing at 28,090.26. The second resistance level is February’s high crossing at 29,568.57. First support is the 20-day moving average crossing at 27,142.21. Second support is the 50-day moving average crossing at 26,517.59.

NASDAQ 100

The September NASDAQ 100 posted an all-time high close on Tuesday, as it extended this year’s rally, still adding fuel to the discussion of decoupling between reality and fiction. The high-range close sets the stage for a steady to higher opening when Wednesday’s night session begins trading. If September extends the rally off March’s low into uncharted territory, upside targets will be hard to project. Closes below the 20-day MA crossing at 10,966.48 would confirm that a short-term top has been posted. First resistance is Today’s high crossing at 11,389.50. Second resistance is unknown. First support is the 20-day moving average crossing at 10,966.54. Second support is the 50-day moving average crossing at 10,549.49.

S&P 500

The September S&P 500 closed higher on Tuesday while posting a new intra-day all-time high of 3395.06. The high-range close sets the stage for a steady to higher opening when Wednesday’s night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above February’s high crossing at 3393.82 would open the door into uncharted territory. Closes below the 20-day MA crossing at 3302.59 would confirm that a short-term top has been posted. First resistance is today’s high crossing at 3395.03. Second resistance is unknown. First support is the 20-day moving average crossing at 3302.59. Second support is the 50-day moving average crossing at 3197.34. 

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