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US stocks fall sharply as oil weighs

FXStreet (Córdoba) - US stocks fell sharply on Monday as plunging oil prices weighed on energy stocks and helped to reverse Friday's gains.

The Dow Jones Industrial Average fell 117.12 points, or 0.66% to 17,730.51, having turned negative for the year. The S&P 500 lost 14.62 points or 0.70% to 2,077.07. The Nasdaq Composite dropped 40.46 points or 0.79% to 5,101.91.

Oil prices fell more nearly 6% to below $38.00 a barrel, settling at its lowest price since February 2009 at $37.65.

DJIA technical perspective

“Daily basis, the DJIA is struggling around its 20 SMA, but the technical indicators are heading crossing their mid-lines towards the downside, with a limited downward momentum, but increasing the possibility of a bearish continuation for this Tuesday”, said Valeria Bednarik, chief analyst at FXStreet. “In the shorter term, the 4 hours chart the index in hovering around a congestion of moving averages, which reflect the lack of clear directional strength at the time being, while the Momentum indicator heads strongly higher above its 100 level, and the RSI advances around 48, limiting chances of a stronger advance. The index will likely struggle for direction during the upcoming sessions, with intraday ranges probably getting tighter as the US Federal Reserve meeting looms”.

Support levels: 17,657 17,610 17,542. Resistance levels: 17,770 17,812 17,867.

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