- Boosted by oil recovery, energy leads gains on Thursday.
- Profit-taking ahead of Thanksgiving caps the rally.
- Defensive sectors close the day in red.
Major equity indexes in the U.S. started the day higher and preserved their momentum during the first half of the session before erasing the majority of their daily gains toward the end of the session as investors booked profits ahead of the Thanksgiving holiday.
Boosted by a decisive recovery witnessed in crude oil prices, the S&P 500 Energy Index added 1.58% and the barrel of West Texas Intermediate settled more than 2% higher above $54. Moreover, the S&P 500 Technology and Communication Services indexes rebounded after suffering heavy losses earlier in the week and allowed the Nasdaq Composite to outperform the Dow Jones Industrial Average and the S&P 500.
Commenting on today’s market action, “The market probably came in a bit oversold this week, which traditionally on a Thanksgiving week, is very unlike what it usually does. This is a little bit of a relief. And if you go back in history this is an up day (day before Thanksgiving) about 85 percent of the time,” Larry Benedict, founder of The Opportunistic Trader in Boca Raton, Florida, told Reuters.
As usual, the improved market sentiment on Wednesday weighed on the so-called defensive sectors and the S&P 500 Utilities and Real Estate indexes closed the day 1.48% and 0.13% lower.
The Dow Jones Industrial Average closed virtually unchanged at 24,465.68 points, the S&P 500 added 8.04 points, or 0.30%, to 2,649.93 and the Nasdaq Composite gained 63.43 points, or 0.92%, to 6,972.25.
DJIA technical outlook via FXStreet Chief Analyst Valeria Bednarik
The daily chart for the Dow shows that the index retains its bearish stance, now developing at the lower end of Tuesday’s range and far below all of its moving averages, which continue lacking directional strength. The Momentum indicator in the mentioned chart maintains its downward slope, currently at fresh November lows, while the RSI settled at 35, lacking bearish strength as the index remained above the weekly low set earlier in the week.
In the 4 hours chart and for the shorter term, the risk is also skewed to the downside, as the Momentum indicator is pretty much flat within negative levels, while the RSI resumed its decline, currently at 29 after correcting extreme oversold conditions reached earlier today. The 20 SMA in the mentioned chart accelerates south well above the current level and far below the larger ones, also indicating that selling interest remains strong.
Support levels: 24,419 – 24,365 – 24,300.
Resistance levels: 24,521 – 24,566 – 24,629.
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