• US indices in the red ahead of Wall Street open
  • European bourses experience sizable declines
  • retesting 200 day SMA

After a solid day of gains for stocks on Friday they’ve come back under pressure at the start of the new week with the US indices in the red ahead of the cash open. European markets have drifting lower this morning with the DE30 taking out last week’s low and hitting its lowest level in 2 weeks. The latest bout of potential political instability is weighing on German stock prices, as well as the ongoing confrontational rhetoric used by Trump with regards to trade.

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 There’s a sea of red amongst European markets today with only the W20 managing to trade higher. Source: xStation

Of all US indices, the appears to be perhaps at the most interesting level. The market has been the worst performing of the 3 large caps in the US and has fallen to retest its 200 day SMA once more. After rallying strongly up and above the 200 day SMA following the US election, the market remained firmly above this trend identification tool until recent months when price has dropped back to it on a number of occasions. Theses dips have presented buying opportunities thus far, but there is a growing concern that the market may actually make a decisive break lower and in doing so possibly signal the end of an uptrend that has been in place for over 18 months. 

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 The is retesting its 200 day SMA once more and a decisive move below here could well signal the end of the uptrend which has been in play for over 18 months. Source: xStation

Moving on to look at individual stock, Microsoft could be worth following after the shares received a buy rating from Atlantic Equities with a price target of $125. The stock which is one of the components of the ended last week just above the $100 mark and the latest favourable rating comes about to believed cloud computing growth. “Azure has replaced Windows as the platform underpinning Microsoft’s enterprise offering, and we forecast it exceeding $100 billion revenue over the next decade,” Cordwell wrote. “With Office 365, Microsoft has already established a strong position in the software as a service market and there remains robust growth potential as the greater accessibility of the cloud delivery model continues to drive expansion in the user base and customers steadily upgrade from basic packages.”

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 Microsoft ended last week close to its record highs with some favourable ratings indicating a possible move to $125 may lie ahead. Source: xStation