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  • Optimism  surrounding trade talks lift major indexes on Monday.
  • Crude oil recovery boosts the energy sector.
  • Technology closes the day in the negative territory.

Major equity indexes started the day modestly higher and remained in the positive territory throughout the session as investors are hoping for a positive outcome from the trade negotiations between China and the U.S. later this week.

“It doesn’t necessarily guarantee that there will be an immediate resolution but it’s certainly a positive development, and it’s certainly something investors are focusing on,”  Adam Phillips, director of portfolio strategy at EP Wealth Advisors in Torrance, California, told Reuters. The CBOE Volatility Index, Wall Street’s fear gauges, edged down nearly 2% while the trade-sensitive S&P 500 Industrials Index rose 0.64%.

Meanwhile, crude oil prices recorded modest gains on Monday amid improved sentiment and helped the S&P 500 Energy Index end the day 0.66% higher.

On a negative note, the dismal performance of chipmakers led by a sharp fall in Intel shares weighed on the S&P 500 Information Technology Index and forced it to close the day in the negative territory with a 0.15% loss. The Dow Jones Industrial Average added 89.54 points, or 0.35%, to 25,758.86, the S&P 500  rose 6.85 points, or 0.24%, to 2,856.98 and the Nasdaq Composite gained 4.32 points, or 0.06%, to 7,820.65.

DJIA technical outlook via FXStreet Chief Analyst Valeria Bednarik

Dow’s rally stalled a few points below February’s high, this last at 25,821, with a break above it putting the index back in bullish territory. Technical readings in the daily chart favor additional gains although the limited intraday range resulted in indicators lacking momentum, but holding within positive readings. The 20 DMA is the closest, heading north some 300 points below the current level.

Shorter term, and according to the 4 hours chart, the index holds well above its moving averages, with the 20 SMA sharply higher above the larger ones, the RSI flat near overbought readings but the Momentum still retreating from overbought readings, this last, rather reflecting the easing strength than suggesting an upcoming slide.  

Support levels: 25,701 25,654 25,597  

Resistance levels: 25,821 25,879 25,936