NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Rebound On Iran’s Plan To Monitor Traffic In Hormuz

SP500 Rebounds From Session Lows As Traders Ignore Rising Oil Prices

SP500 rebounded from session lows as traders shrugged off the huge rally in the oil markets and focused on Iran’s plans to regulate the passage through the Strait of Hormuz.

WTI oil rallied above the $110 level as President Trump indicated that U.S. will continue the operation against Iran. Traders are worried that U.S. may start a ground operation to unblock the Strait of Hormuz.

Meanwhile, Iran looks ready to present the new scheme of passage through the Strait. Iran plans to monitor traffic through the world’s key oil route together with Oman. Any vessel that passes through the Strait of Hormuz would be required to pay a toll.

Recent reports indicated that some vessels have already started to pay Iran to get through the Strait of Hormuz. It remains to be seen whether Iran’s plan will work as vessels pass through international waters. Western countries, as well as Iran’s neighbours in the Gulf, will surely oppose the plan.

Interestingly, Iran’s plan was sufficient to make traders rush to buy stocks. It looks that traders are searching for reasons to buy stocks after the recent pullback. It remains to be seen whether it is a good idea as the risks of a ground operation in Iran are rising. Such an operation may push oil prices towards historic highs, which will be bearish for stocks.

Not surprisingly, energy stocks were among the biggest gainers in today’s trading session. Real estate stocks have also gained upside momentum as traders reacted to the pullback in Treasury yields.

Consumer cyclical and healthcare stocks were among the biggest losers today. Basic materials stocks have also found themselves under pressure as traders reacted to pullbacks in gold and silver markets.

Currently, SP500 is trying to settle above the resistance at 6550 – 6560. In case this attempt is successful, SP500 will move towards the next resistance level, which is located in the 6640 – 6650 range. RSI is in the moderate territory, and there is plenty of room to gain momentum in case the right catalysts emerge.

NASDAQ Moves Away From Session Lows As Traders Buy The Dip

NASDAQ has also rebounded from session lows as traders hoped that oil will start flowing through the Strait of Hormuz after Iran develops its monitoring scheme.

Intel and Advanced Micro Devices were among the biggest gainers in the NASDAQ index today. Tesla  was down by 5.7% as traders reacted to the company’s first-quarter production report.

NASDAQ is trying to settle above the resistance level at 24,000 – 24,050. If NASDAQ manages to climb above the 24,050 level, it will move towards the next resistance at 24,350 – 24,400.

Dow Jones Attempts To Settle Above The Resistance At 46,600 – 46,700

Dow Jones  moved away from session lows amid a broad rebound in the equity markets. Traders are ready to buy dips, which is a bullish sign.

The nearest resistance level for Dow Jones is located in the 46,600 – 46,700 range. This resistance level has been tested many times and proved its strength. In case Dow Jones climbs above the 46,700 level, it will gain additional upside momentum and move towards the next resistance at 47,400 – 47,500.

For a look at all of today’s economic events, check out our economic calendar.