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Wall Street closed in the green yesterday, with the DJIA up 67 points of 0.39%, ending the day at 17,545.18, and the housing sector leading the advance. The index dropped at the opening weighed by a weaker-than-expected New York manufacturing index that fell to levels not seen since 2009. But it slowly came back and extended its advance above a daily descendant trend line coming from July 20th high at 18,136.
The daily chart shows that the index stalled around its 20 SMA, whilst the technical indicators aim higher, but are still below their mid-lines, providing little support to a new leg higher.
In the short term, the 20 SMA heads higher currently around 17,455, the Momentum indicator heads lower, but remains above 100, while the RSI indicator holds flat around 58, also lacking enough upward potential to confirm further advances for the Tuesday.
Meanwhile the FTSE 100 closed the day flat at 6,550.30, with mining shares among the biggest losers, on the back of weaker metal prices. Also, supermarket group Morrisons fell 1.18% after reports that it may sell its 160 M-Local convenience stores.
The London benchmark has managed to recover from a fresh 3-week low set at 6,508, but technically, the index maintains its bearish tone, as the daily chart shows that it continues developing below a bearish 20 SMA whilst the Momentum indicator turned south around the 100 level and the RSI heads slightly lower around 40.
In the 4 hours chart the 20 SMA has extended its decline above the current level, now offering a strong dynamic resistance around 6,597, but the Momentum indicator aims higher above the 100 level and the RSI indicator holds flat around 42, all of which limits the downside, at least in the short term.
A break below 6,480 is now required to confirm a stronger decline towards the 6,300 level, January 2015 low.