فصل 3 04/18 DJIA: Prevent Bulls from Taking Profits Although the Earnings Season Exceeded Market Expectati
Abstract: U.S. stocks opened mixed on Tuesday. The financial reports of Bank of America and Johnson & Johnson exceeded the expectations of Wall Street, indicating that under the difficult economic background, the performance of many companies was better than the people concerned.
Fundamentals
U.S. stocks opened Tuesday, with the Dow down 22.02 points, or 0.06%, to 33,965.16. The Nasdaq rose 78.44 points, or 0.65%, to 12,236.16. The S&P 500 rose 17.09 points, or 0.41%, to 4,168.41.
In the results of individual stocks, Bank of America announced that its revenue and profit for the first quarter both exceeded expectations. Johnson & Johnson's results exceeded expectations and the 2023 performance guidelines were revised upwards.
Goldman Sachs' results put a damper on market optimism. Goldman Sachs reported lower-than-expected revenue in the first quarter, dragged down by its Marcus consumer lending platform results.
Of the 30 S&P 500 companies that have reported results so far, 90% have higher-than-expected earnings per share and 73% have higher-than-expected revenue.
This was the biggest surprise in the first week of the earnings period since at least 2012, thanks mainly to impressive results from JPMorgan Chase, Citigroup, and Wells Fargo.
Bank of America strategist said that the first quarter of this year's results started well, completely beyond analysts' pessimistic expectations. Of the 30 companies that have reported results so far, accounting for 10% of the S&P 500, 90% reported earnings per share that exceeded expectations and 73% reported sales that exceeded expectations.
Much of this is due to the impressive results of JPMorgan Chase, Citigroup, and Wells Fargo, which last matched the first week of the earnings season back at least to 2012.
Despite the banking panic in March, the big banks' solid results helped kick off the earnings season. Banks may tighten credit standards, but big banks have plenty of capital to operate compared with previous crises. The strong performance of the banking giants helped ease fears of a crisis in Silicon Valley Bank after its collapse last month.
Technical Analysis
The Dow Jones Industrial Average appears to be showing strong bullish momentum and is likely to continue testing the first resistance level of 34,370. Currently, the price is above the first support level of 33,840, and the second support level of 33,587, which are overlapping supports. The second level of support also coincided with the 61.80% Fibonacci retracement, providing additional momentum.
The first resistance level of 34,370 is a multiband resistance level. If the price continues to rise, it may encounter an intermediate resistance level of 34,135, which is also a band-high resistance level.
If the price breaks the first resistance level, the next resistance level that needs attention is 34,666, which is an important resistance level. However, if the price falls below the first support level, it may move toward the second support level of 33,587.
Overall, the index has been held down on the trend line and will continue to be tested. If the bulls prove strong enough, there will be more consolidation between the 200-day SMA and the trend line. On the other hand, if there is a bullish breakout and higher highs, the bullish trend may continue. On the downside, the most recent support levels are 33,500 and 100-day SMA.
Judging from the overall trading structure, the current price has tested the center of the high consolidation at the beginning of the year, and it will be more difficult to continue upward. We believe that the path of least risk is downward. It is recommended to go short at the highs.
Trading Recommendations
Trading direction: Short
Entry price: 34145
Target price: 32777
Stop loss: 34710
Deadline: 2023-05-03 23:55:00
Support: 33896, 33596, 33266
Resistance: 34129, 34344, 34701
