Dow Jones Industrial Average (DJIA)

• U.S. stock indexes recorded their best week in a year, rising 5%-6% as post-election optimism, driven by expectations of tax cuts and looser regulations under Trump, propelled all three major indices to record highs. The Fed's expected quarter-point rate cut on Thursday kept markets steady, and eased investor anxiety, with the VIX dropping 31% to a three-month low. Bitcoin also surged, closing at $77,360 (+10.9% WoW), boosted by Trump's pro-crypto stance.
• Looking ahead, strong gains last Friday suggest post-election momentum may carry into the first half of this week, ahead of the October CPI (expected at 2.6% YoY, up from 2.4% in September, with core CPI steady at 3.3%) on Wednesday and PPI data release on Thursday. With Trump back in the White House, global markets may experience policy-driven volatility.
• Technically speaking, the DJIA remains in an uptrend, briefly surpassing the 44,000 mark before closing slightly lower. However, divergences in the stochastic and RSI indicators suggest potential for near-term consolidation or a pullback. Additionally, the SmartMCDX banker chip's rise past the 15 threshold supports consolidation.
• In short, we expect an upward bias through the first half of the week, though CPI and PPI data coming below expectations could prompt profit-taking. Key resistance levels are 44,158 and 45,080, while support levels lie at 42,428 and 41,087, in line with the 5- and 13-week SMAs.

Source: Kenanga Research - 11 Nov 2024