Stock Indices: Dow Jones comes off four-month highs as oil slump extends

April 5, 2016 9:14 am

On Monday Dow Jones Industrial Average traded within the range of 17,710.67-17,806.38. The benchmark closed at 17,737.00, retreating 0.31% (55.75 points) on a daily basis. It has been the 18th drop in the past 44 trading days. The blue-chip gauge has added 0.29% to its value so far in April, following two consecutive months of gains.

Equities lost ground on Monday, as crude oil futures continued to retreat. April 4th marked the 38th drop in oil prices out of the past 76 trading days. Oil futures for May delivery went down as low as $35.39 per barrel on Monday, or the lowest level since March 4th, and closed at $35.42, plummeting 3.66% on the day. As of 9:11 GMT today oil was up 0.54% on the day to trade at $35.61 per barrel, after going up as high as $35.64 earlier.

Yesterday the commodity plummeted sharply, after BNP Paribas said it forecasts oil futures may re-test the 13-year lows, registered on February 11th, amid global stockpile surge. In addition, at the end of last week several media reported Saudi Arabia will probably refuse to comprehensively freeze oil production levels later in April, unless Iran pledges to limit its own production as well.

Among the companies included in the benchmark, 18 posted a daily decline on Monday and 12 posted a daily gain. Shares of Nike Inc (NKE) recorded the worst performance within the Dow on April 4th, going down 2.63% to close at $59.97. It has been the 8th drop in the past 20 trading days and also the steepest one since March 23rd. April 4th low of $59.42 per share has been the lowest price level since March 11th, when a low of $59.13 a share was registered. Nike shares has fallen 2.44% so far during the current month, following four consecutive months of decline. The company reported disappointing quarterly revenue in March.

General Electric Company (GE) was the second worst performer within the DJIA on April 4th, depreciating 2.19% to close at $31.23 per share. It has been the 11th drop in the past 20 trading days and also the sharpest one since February 11th. April 4th low of $31.09 per share has been an exact test of the low from March 28th. General Electric has lost 1.76% of its value so far in April, following two consecutive months of gains.

At the same time, the shares of Pfizer Inc (PFE) registered the most notable daily increase within the DJIA on April 4th, going up 2.26%, to close at $30.72, while marking their 11th gain in the past 20 trading days, a second consecutive one and also the steepest one since March 11th. April 4th high of $30.75 per share has been the highest price level since February 26th, when a high of $30.90 a share was registered. Pfizer has risen 3.64% so far during the current month, following five consecutive months of decline. The company’s credit rating has been revised up to AA- by Morningstar, after it became clear that Pfizer’s PCSK 9 drug, Bococizumab, performed better than its placebo counterparts at LDL cholesterol reduction.

Merck & Company Inc (MRK) was the second best performer within the Dow for a second straight session on Monday, appreciating 1.30%, to close at $54.40. It has been the 10th gain in the past 21 trading days and also a second consecutive one. April 4th high of $54.63 per share has been the highest price level since December 2nd 2015, when a high of $54.99 was recorded. In addition, the daily trading volume (10.25M) has been the highest since March 18th. Merck & Co has added 2.82% to its value so far in April, following a 5.38% surge in the preceding month.

Daily and Weekly Pivot Levels

By employing the Camarilla calculation method, the Tuesday pivot levels for DJIA are presented as follows:

R1 – 17,745.77
R2 – 17,754.55
R3 (range resistance) – 17,763.32
R4 (range breakout) – 17,789.64

S1 – 17,728.23
S2 – 17,719.45
S3 (range support) – 17,710.68
S4 (range breakout) – 17,684.36

By using the traditional method of calculation, the weekly pivot levels for DJIA are presented as follows:

Central Pivot Point – 17,679.79
R1 – 17,924.61
R2 – 18,056.00
R3 – 18,300.82

S1 – 17,548.40
S2 – 17,303.58
S3 – 17,172.19

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