Tuesday, January 11, 2011

Consolidations Continue For Dow Jones, 11-01-2011

On Wall Street, the Dow Jones tumbled as much as 100 points intraday as concerns over the euro zone debt crisis dampened the appetite for risk ahead of a flurry of bond auctions.

However, it managed to narrow the losses to 37 points in anticipation of a strong Alcoa 4Q2010 results and M&A news, including Duke Energy’s US$13.7 billion acquisition of Progress Energy, a tie-up that will create the country’s largest utility as well as DuPont’s agreement to buy Danisco, a Danish specialty food ingredients maker, for US$5.8 billion.

After the bell, Alcoa earnings beat estimates and offers an improving outlook for 2011. Other major earnings releases this week are Pfizer (Jan 11), Intel (Jan 13) and JP Morgan (Jan 14).

We reiterate that Dow is slated for further profit taking consolidations as the 4Q2010 reporting seasons begin, accompanied by weakening technical indicators as the 10-day SMA of 11640 was broken. Immediate supports are 11572 (mid Bollinger band) and 11404 (lower Bollinger band) whilst resistance level is 11741 (higher Bollinger band).

Consolidations Continue For Dow Jones.

Source: StocksChart

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