- Summary:
- The Dow Jones futures extends its losses for the 6th straight trading session as the coronavirus continues to spread in the US and other countries.
The Dow Jones futures are down for the 6th straight session after the US Centre for Disease Control announced a new US coronavirus case in which the transmission source is presently unknown. Microsoft has downgraded its quarterly earnings as a result of the coronavirus outbreak. Also, a case of coronavirus reinfection in a Japanese patient who was thought cured is generating new concerns.
Microsoft issued an earnings downgrade, saying it will miss its revenue targets as a result of the coronavirus outbreak shuttering suppliers of its components. It therefore follows the footsteps of Apple and MasterCard, which issues similar downgrades last week. Also, chipmakers AMD and Nvidia are lower today, as are Amazon and Tesla. These drops pulled down the Dow Jones futures by about 1% in Thursday trading.
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Technical Outlook for Dow Jones
The speech by President Donald Trump about efforts to contain the coronavirus did little to assuage the US markets. The Dow is trading at 26695, just north of intraday lows at 26505 in what has been a choppy trading day.
The Dow has therefore dropped below the previous support of 27373 and continues to march towards the next support at 26130, having broken below the middle ray of the pitchfork. However, this move could encounter a speed bump at 26723, where previous highs of 23/30 April 2019 were seen. This price level also featured two clusters of low price at 5-10 July 2019 and 23-27 Sept 2019. Lows were also seen at this area between 23-26 October 2019.
A breakdown of this level clears the path towards 26130, but a bounce on the present support could help the Dow retest the 27373 price area, which will now function as resistance.