Dow Jones Closes Above 13500

Submitted by: Trader J Howell

Dow Jones Closes Above 13500:

The Dow Jones closed above this resistance level of 13500 for the first time since the 2008 crash. This is psychologically, very important level for the investors as the Dow Jones was trading below this level for so many days. The Dow Jones found this mark, a hurdle to cross and investors and other analysts were waiting for a trigger.

This trigger is coming in the form of earnings and this is helping the Dow Jones as well as the other United States indices to touch new highs and break important resistances. The markets will most probably touch their highs which they made in 2007.

After the 2008 crash, many companies did fall and their stock prices collapsed to ground levels. In the recent past, reforms along with some good positive macro economic data are helping the United States markets as well as the world markets to touch new highs. The sentiment is increasing among most of the investors and that is driving the stock markets higher.

Some of the analysts feel that this move will not go on forever and there should be a pause coming in. Dan Greenhaus, chief global strategist at BTIG LLC, said, We ve been up eight days in a row. There are a number of indicators that lead us to believe a market pause is more likely than not, but making the case for a sustained downside is difficult to do.

Technical Analysis:

Technically, some of the analysts feel that the market is ready to move higher and cross the 14000 mark. But, some of other ones feel that the market is over bought and it needs some time to settle down and consolidate. On the up side, there are no major resistances for the index.

But, on the down side, there are some important supports at the 13500 mark. This level will start acting as a good support because it acted as a strong resistance in the past. Below that, investors should watch out for the 13000 level.

Stocks to watch out for:

Research in Motion is in the news after the company said that it will be launching its new smart phone today. Most of the analysts say that the company s future is purely going be decided on the basis of this smart phone. The company s stock price has been raising form the past few months on the back of anticipation of some good sales from this smart phone.

Eric Jackson, founder of Iron fire Capital, said, If this thing gets ignored or is seen as a nothing phone, what do you have… a few Playbooks? This thing has to work. This analyst feels that the company has more up side from the current levels and investors could buy it at the current market price.

He also added, There is a big difference between RIM and (Palm and Nokia), which is that RIM’s got this huge installed base of about 80 million globe subscribers. And it is because of this loyalty that Jackson thinks these diehards will continue to support the company they know and love.

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