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      DJIA: It Is Recommended to Go Long at the Lows as U.S. Stocks Diverged

      Inflation and RecessionCentral Bank Policy TrendsGlobal Stock Markets
      Summary:

      U.S. stocks were relatively flat in Tuesday's trading. Investors are seemingly reluctant to take major action after the long holiday weekend, which leads to divergent moves. Although the Dow narrowed its losses before the close, showing clear signs of a downward trend, the index could move higher again before falling further.

      Buy DJIA
      End Time
      CLOSED

      34010.89

      ENTRY PRICE

      34270.00

      TGT PRICE

      33690.00

      SL PRICE

      32508.66 +76.58 +0.24%

      32089

      Points

      Loss

      33690.00

      SL PRICE

      33673.92

      CLOSING

      34010.89

      ENTRY PRICE

      34270.00

      TGT PRICE

      Fundamentals

      On Tuesday, the major U.S. stock indexes closed with the Nasdaq up slightly by 15.96 points, or 0.1%, to 11095.11, the S&P 500 down 8.12 points, or 0.2%, to 3990.97, and the Dow down 391.76 points, or 1.1%, to 33910.85.
      Wall Street trading was volatile as investors expressed some uncertainty about the market outlook following the recent strengthening.
      Goldman's slump weighed on the Dow, with the financial giant plunging 6.4% on the day. Goldman Sachs' shares plunged after it reported lower-than-expected Q4 earnings.
      On the other hand, Morgan Stanley reported better-than-expected Q4 results, with its share price surging 5.9%. Morgan Stanley said in its financial results that consultancy revenue decreased YoY due to a decrease in merger and acquisition transactions. Share underwriting revenue for various products decreased significantly from the corresponding period of last year, reflecting a significant decrease in share underwriting volume worldwide. At the same time, net fixed income increased YoY, reflecting stronger performance in macro and credit products due to increased customer engagement, but partially offset by a significant drop in the performance in commodities.
      U.S. stock index futures barely changed before Wednesday's opening as investors prepared to use more corporate financial analysis to test the warning signs of an "earnings recession."
      Although we do not yet have the next set of catalysts for a recession, the Fed's aggressive monetary policy last year may still affect the U.S. economy and reduce corporate earnings in 2023.
      DJIA: It Is Recommended to Go Long at the Lows as U.S. Stocks Diverged_1

      Technical Analysis

      After falling 391.76 points yesterday, the Dow Jones index gained short-term support after falling too fast. Due to the relative congestion of the time period, the support will be strengthened, thus turning upward.
      In the near term, the upward momentum appears to be generally supported by momentum indicators. The Average Directional Movement Index is moving positively higher, and the stochastics are just below their oversold level. However, the further uptrend is being suppressed by the 10-day SMA. Prices are expected to consolidate in the near term between yesterday's low of 33813 and Friday's high of 34343.
      Overall, higher prices are generally supported by momentum indicators in the short term, but bears could try to reassert their position in the market by pushing the index below yesterday's low of 33813. It is recommended to go long at the lows.

      Trading Recommendations

      Trading direction: Long
      Entry price: 33840
      Target price: 34270
      Stop loss: 33690
      Deadline:2023-02-01 23:55:00
      Support: 33813, 33722
      Resistance: 34128, 34270
      Risk Warnings and Investment Disclaimers
      You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or signal, or any other product is suitable for you based on your investment objectives and financial situation.

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      Eva Chen

      Analyst

      Master of Economics, 8 years in the financial industry, CFA holder, joined HSBC (Hong Kong) Bank in 2013 after graduating from the University of California, USA in the Investment Research and Markets Department. With years of financial market experience and trading experience, having provided excellent investment advice to many brokerages, entity derivatives importers and clients in Greater China.

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