Prominent market technician Ralph Acampora is growing increasingly concerned about recent moves in the stock market, notably in the Dow Jones Industrial Average.
Acampora, a pioneer in the field of chart-based trading, said that the primary utility of reading charts is a “risk management” function, and what he’s observing currently suggests that the bullish dynamic in equities may be unraveling.
That is particularly the case after the Dow DJIA, on Monday closed below its 200-day moving average for the first time since June 2016, and as key components of the blue-chip benchmark spiraled lower.
“I sell when major support levels are broken…. take a look at Caterpillar as an example…The Dow Industrial broke a near-term support yesterday—this is getting uglier action” he said. Moving averages and other technical patterns can help analysts determine bullish and bearish momentum in an asset.
Bearish action in Caterpillar comes as investors worry that a tit-for-tat global trade spat between the U.S. and trading partners in China, Europe, Canada and Mexico could morph into a full-blow trade war, with the potential to dent global economic growth.
“There are certain areas that are holding up well so…no reason to sell. But as I mentioned, you’ve gotta be very, very selective here,” Acampora said. ‘
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.