Dow Jones (US30 Chart Technical Outlook) set to resume gains ahead of NVidia’s results, with 40,079 in play.
Stocks took a breather on Monday, correcting some of the gains seen last week – moves triggered by the relatively softer US inflation data. Hawkish comments from several Fed officials also contributed to cooling markets.
I expect investors to wake up on Tuesday, resuming the rally. Optimism about falling interest rates and technological advances outweighs worries about bubbles or a recession. NVidia’s earnings report is next on the agenda, and expectations are high. While the chipmaker powering the AI phenomenon may eventually disappoint, expectations boost the prices of all shares.
Dow Jones (US 30) exited overbought territory – the 4h-RSI slipped below 70. There is no room for rises. Resistance is at 40,079, which is followed by 40,197, the 138.2% Fibonacci extension of the recent 39,779-40,079 range. Support below 39,779 is at 39,292.
