US Market Outlook: Wall Street hold higher

The Dow Jones Industrial Average, S&P 500 and the NASDAQ Composite index manged to stay afloat. The Dow Jones dipped slightly and was down 0.56 per cent for the week. The S&P 500 and the NASDAQ Composite indices closed the week marginally higher by 0.36 per cent and 0.14 per cent respectively. The short-term picture remains positive. As mentioned last week, the US benchmark indices have room to rise further from here.

The near-term picture is slightly weak. The Dow Jones has resistance in the 54,200-54,400 region. A fall to 53,300 or even 53,000 looks possible in a week or two. However, a fall below 53,000 is unlikely. A bounce from the 53,300-53,000 support zone can take the Dow Jones higher to 54,000 again. An eventual break above 54,400 will then clear the way for the rise to 56,000 and even 58,000.

As mentioned last week, a decisive break below 53,000 is needed to negate the bullish view and drag the Dow Jones down to 50,000.

The index is inching up. Immediate support is at 7,700. That keeps intact our bullish view of seeing 8,000 on the upside. The price action thereafter is going to be crucial.

A decisive break above 8,000 is needed to get an extended rise to 8,400-8,450. On the contrary, if the index reverses lower from 8,000, a fall to 7,600-7,500. The short-term picture will turn negative only if the index declines below 7,500.

The index is holding higher and there is no major change in the view. We see limited upside from here. A test of 27,000 is possible in the near-term. An extended rise to 28,000 is also a possibility that cannot be ruled out.

We expect the NASDAQ Composite index to reverse lower from around 28,000 and fall back to 26,000 or even lower. We reiterate that more caution is needed as the index goes up from here rather than being overly bullish.

The dollar index (99.65) was stuck between 99.40 and 100.10 for the second consecutive week. So, there is no change in the view and we are repeating what was said last week.

Support is in the 99.20-99 region. We expect the downside to be limited to 99. A decisive break above 100.10 can give a breather. It can then take the dollar index higher to 100.50-101.

The index will come under more selling pressure if it breaks below 99. If that happens, a fall to 98 can be seen. It is still a wait and watch situation.

The US 10Yr Treasury Yield (4.69 per cent) has been oscillating between 4.6 per cent and 4.75 per cent for more than three weeks now. A breakout on either side of 4.6-4.75 per cent will determine the next move.

A break above 4.75 per cent can take it up to 4.8 per cent. A decisive break above 4.8 per cent will then boost the momentum. Such a break can take the US 10Yr Treasury Yield up to 5 per cent over the medium term.