Dow Jones Industrial Average Up On Tesla, Trade Optimism

Summary:
• Stocks of Tesla and Tiffany & Co are helping to drive bullish investor sentiment on the Dow Jones today, as markets prepare for Thanksgiving Holiday.

There was some significant pre-market activity on the Dow Jones futures today as shares of Tesla, Uber, Tiffany & Co all experienced significant movement.

Uber’s shares fell 4% on Monday after Transport for London, London’s transport regulator, decided not to renew the license of the ride-hailing company. However, the initial down movement of Dow Jones futures in the pre-market trading session in response to this news, was quickly overcome by the positive news from Tesla’s Elon Musk. Musk put out successive tweets on Saturday and Sunday where he confirmed that pre-orders for the Cybertruck had increased from 147,000 orders to 200,000 orders. This news pleased the market and sent Tesla’s shares up by 5% in pre-market trading, making up for Friday’s disappointing 6% drop on reported design flaws for the electric truck.

Tiffany & Co also benefited this morning from the confirmation of its deal with Louis Vuitton Moet Hennessy (LVMH), which is set to acquire the outfit for $16 billion. The further 6% uptick in Tiffany has also helped to push the Dow up, as did renewed optimism from the US-China front.

The mood in the market in this shortened holiday week is generally optimistic this Monday and this has sent the Dow Jones higher. The Dow has therefore resumed its upside push towards previous all-time highs, but it could encounter resistance at the upper border of the rising wedge pattern.

Failure to break the upper border of the wedge means that price action has respected the expected price move within the pattern, which opens the door for a retreat towards the opposing wedge border. This move will take the Dow Jones average to the 27,353 price level (previous highs of the weekly candles of July 15 and 22, and October 28). Further support lies at 26675, which is where weekly candle highs of January 16, 2018 and April 15/22, 2019. In continuation of this move, a breakdown of the rising wedge could target 25, 355. This is where previous lows of May 20 and August 12 are located.

If the price action of Dow Jones is able to push above the rising wedge on improved risk sentiment from the US-China trade deal or other positive factors, then the Dow would target previous highs at 28,158. Above this level, the Dow would be in the territory of new all-time highs.