US stocks fall sharply weighed by oil

By FXStreet The DJIA index closed 189.08 points or 1.14% lower on Tuesday at 16,431.58. The S&P 500 index closed 1.23% lower at 1,921.60 and the tech heavy Nasdaq declined 1.6%.

Investors got a reminder about the vulnerability of the stock market rally to gyrations in oil prices. Drop in Chinese yuan and the slide in oil was enough to trigger a flight to safety.

Energy shares and materials producers led declines. Shares in Freeport-McMoRan Inc. declined 6.5% and shares in Chevron Corp fell 4.2%. Banking stocks also took a hit, with JP Morgan sliding more than 3%.

DJIA technical view

“From technical perspective, the DJIA index appears weak after breaching the rising trend line in the 4 hours chart while the RSI is pointing to a dip below the 50.00 level as well”, said Omkar Godbole, analyst at FXStreet. “Furthermore, the daily close below 16,510 adds credence to the bearish view. Overall, short-term bearishness is likely and the upticks could be sold into unless the index rises above Monday’s high of 16,665”.

Support Levels: 16,348 16,204 16,164. Resistance Levels: 16,510 16,665 17,019.
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Source:: FX Street