Facts
- The US100 is up more than 2.5%, currently trading at 18,797 points, 14.3% above the lows from April 7th.
- The US100 has broken above the 38.2% Fibonacci retracement of the downward wave from February 2025.
- VIX futures are down 5.3% today to 25.03, the lowest level since April 3rd.
- Tesla shares are up about 5% in pre-market trading following the Q1 2025 results.
- Shares of BigTech companies, including Meta Platforms, Alphabet, and Microsoft, are showing gains in pre-market trading as of 9:20 AM GMT
- Donald Trump has assured that his intention was not to dismiss Jerome Powell prematurely.
Recommendation
Long position on US100 at market price.
- Stop loss: 17,846
- Take profit: 19,383
Opinion
The upward momentum in the U.S. stock market has been extended today, with the biggest ‘beneficiary’ of this change being the tech sector index, which had previously been hit hardest by the prospect of Donald Trump’s ‘trade wars’ and uncertainty surrounding U.S. domestic policy. However, the market reacted optimistically to Tesla’s quarterly report, despite the results and revenues indicating a slowdown in business. Tesla’s stock is up more than 5% in pre-market trading. Donald Trump indicated that his intention was and is not to remove Jerome Powell from the position of Federal Reserve Chairman, which has further ‘calmed’ market sentiment around domestic policy. Yesterday, Treasury Secretary Bessent expressed confidence that a favorable deal with China is still possible, provided that Beijing is willing to negotiate.
The positive start to the BigTech earnings season, initiated by Tesla (Alphabet GOOGL.US will report after the session on Thursday), may attract more buying activity. Meanwhile, the US100 is still trading about 10% below the 200-session EMA200, the exponential moving average on the daily timeframe (red line). We recommend taking a long position in US100, with a take profit target at 19,383 points, based on the latest price reactions, and a stop loss at 17,846 points, which is a significant level corresponding to the 23.6% Fibonacci retracement of the February decline and recent price reactions.
Source: xStation5
