The U.S. stock indices have advanced on a weekly basis and reached new record highs as investors wait for a U.S. coronavirus relief package. Significant progress has been made over the weekend, the U.S. lawmakers reached a compromise, and a $900 billion coronavirus relief package could be on the way.
This is certainly positive for the U.S. stock indices, which could open in “green” at the beginning of this trading week. The U.S. Federal Reserve had a meeting last Wednesday and left its monetary policy unchanged, but the FED announced that it would support the economy for as long as needed using its full range of tools.
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Despite this, the current risk/reward ratio is not good for long-term investors as the U.S. still needs to face the COVID-19 challenges. The country reported over 250K new coronavirus cases in the last 24 hours, and the correction of the U.S. stock market could be around the corner.
There is still a long way to fight against the pandemic; many big companies will have a further drop in revenues and could face liquidity problems.
S&P 500 up 1.25% on a weekly basis
For the week, S&P 500 (SPX) booked a 1.25% increase and closed at 3,709 points.
The critical support levels are 3,600 and 3,500 points; 3,750 and 3,800 represent the resistance levels. If the price jumps above 3,750 points, it would be a “buy “signal for the S&P 500, but if the price falls below 3,500 points, it would be a strong “sell” signal, and we have the open way to 3,400 points.
DJIA up 0.44% on a weekly basis
For the week, the Dow Jones Industrial Average (DJIA) advanced 0.44% and closed at 30,179 points.
The current risk/reward ratio is not good for long-term investors, but as long the DJIA is above 28,000 points, this index remains in a bull market. If the price jumps above 31,000 points, it would be a buy signal for Dow Jones Industrial Average (DJIA), and we have the open way to 32,000 points.
On the other side, if the price falls below 29,000 points, it would be a “sell” signal, and we have the open way to 28,000 points.
Nasdaq Composite up 3.05% on a weekly basis
The Nasdaq Composite (COMP) advanced 3.05% on a weekly basis and closed at 12,755 points.
As long the price is above this trend line and 11,000 points, the Nasdaq Composite index remains in a bull market, and there is no indication of the trend reversal.
Summary
Dow Jones advanced 0.44% for the week, the S&P 500 1.25%, Nasdaq 3.05%, and all three indices remain in a bull market. The U.S. lawmakers reached a compromise, and a coronavirus relief package could be on the way, but despite this, the current risk/reward ratio is not good for long-term investors.
