Stock market breadth: Traders optimistic about Biden's victory

Naeem Aslam Zaye Capital Markets

Stock Market Today

Traders are pleased with the U.S. presidential election outcome so far. Joe Biden, has become the U.S president-elect. Historically speaking, after the U.S. presidential elections, November and December months post decent gains after the U.S. elections. Moreover, traders are hoping that Joe Biden will be better able to control the virus situation.

The Asian stock market started the week on a positive note. The ASX 200 index closed with a gain of 1.75%. The Korean Kospi index advanced 1.27%, while the Nikkei index surged 2.12%. The Shanghai index rose by 1.86%.

Dow Jones and SP 500: Market Breadth

The Dow Jones’ market breadth gained momentum on Friday. 73% of the Dow Jones stocks traded above their 200-day moving average. This is a change of +3% from a day earlier.

The S&P 500 stock breadth became more stronger. 70% of the shares traded above their 200-day moving average. This is a change of +2% from a day earlier.

Dow Jones Futures Today

The Dow Jones futures are trading higher by 350 points today. In terms of economic data, investors are feeling optimistic about the Chinese trade balance data released over the weekend, which confirmed that the world's second-biggest economy is on the right track. The number came in at 402B against the forecast of 330B.

The Dow Jones futures have started the week on solid footing. The Dow Jones futures are trading above the 50, 100, and 200-day SMA on the daily time frame, which confirms that the upward trend is intact. The near terms resistance is at 29164, and the support is at 28204. As for the RSI, it is also in an upward trend and still a bit way from its overbought area.

The S&P 500 futures, which represent the broader stock market, have approached the all-time high area once again. The last time the S&p 500 futures were trading above the 3545 level was back in August this year. The price is trading above the 50, 100, and 200-day SMA, which confirms the upward trend. The near term resistance is at 3588, and the support is at 3505.

Stock Market Rally

The S&P 500 stock index scored decent gains for the week but closed with losses on Friday; the index fell by 0.03%. The energy sector led the index lowerr- six out of 11 sectors closed lower.

The Dow index also declined on Friday; the Dow stocks moved the index lower by 0.24%. 18 shares of the Dow fell, and 12 closed higher.

The NASDAQ composite, a tech-savvy index, closed with a gain of 0.04%.

SP 500 Leaders and Laggards: News Corp and Flow Serve

News Corp stock contributed the biggest gain, soaring 8.92%. Flowserve stock was the largest drag; it fell by 9.39%. The S&P 500 stock index is up 8.6% so far this year.

Dow Jones Leaders and Laggards: J&J and UnitedHealth

J&J stock advanced higher by 1.78% and was the biggest mover for the Dow, while UnitedHealth stock declined 1.96%, the biggest drag for Dow Jones Industrial Average index.

Author

Naeem Aslam

Zaye Capital Markets

Based in London, Naeem Aslam is the co-founder of CompareBroker.io and is well-known on financial TV with regular contributions on Bloomberg, CNBC, BBC, Fox Business, France24, Sky News, Al Jazeera and many other tier-one media across the globe.

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