Thursday, December 16, 2010

Dow Jones Shows Strong Resistance At The Upper Bollinger Band, 16-12-2010

After rising to a new high of 11519 (+43 points) intraday, the Dow Jones fell 19 points to end at 11457 on profit taking, as investors fretted over euro-zone finances after Moody's Investors Service said it may downgrade its ratings on Spanish
government debt.

However, better-than-expected reports on industrial production and empire state index coupled with tame CPI numbers helped to offset the decline.

Meanwhile, an US$858bn package of tax breaks and an unemployment-insurance extension sailed through the Senate yesterday. Investors are now looking for Congress to extend the Bush-era tax cuts.

On Wall Street, strengthening economic data and a low VIX around 18 could signal that a lot of bad news has been discounted. In our view, this will drive the Dow towards our envisaged technical resistance levels of 11700. Immediate support levels are 11000-11200 points.

Dow Jones shows strong resistance at the uppper bollinger band.


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