The DocuSign stock price retreated by over 6% after the market closed on Thursday, following the release of its third-quarter financial results. It fell to $66.50, down from the regular session high of $72.35, and 35% below its highest level in December last year.

DocuSign growth has stalled 

DocuSign, a company that thrived during the pandemic, has come under pressure in the past few years as competition in the industry has escalated. This competition is coming from companies like Dropbox, PandaDoc, Google, and Zoho Sign.

As a result, while the company is growing, the pace has deteriorated in the past few years. Financial results released on Thursday showed that its revenue rose by 8% in the third quarter to $818 million, with most of this being in the subscription segment.

DocuSign’s billings rose by 10% to $829 million, while its gross margin dropped a bit to 79.2%.

The management expects that its revenue growth will remain in the single digits, with the fourth quarter revenue coming in at between $825 million and $829 million, representing a 7% annual growth rate.

DocuSign’s billings are expected to come in at between $808 million and $812 million, a 7% increase from the same period last year, and lower than last quarter’s.

Most importantly, DocuSign expects that its annual revenue will be between $3.20 billion and $3.212 billion, while its billings will be between $3.37 billion and $3.39 billion.

These estimates were slightly better than what Wall Street analysts expect. Data compiled by Yahoo Finance shows that the average estimate is that its revenue will be $3.19 billion. DocuSign has a long history of beating analysts’ estimates.

However, the risk is that the company’s annual revenue for next year is expected to continue the deceleration pace, with the average estimate being a 6.95% growth rate.

DOCU’s rule-of-40 shows it is overvalued 

With DocuSign’s growth slowing, the management has turned to several strategies to boost the stock price. For example, the management is now actively buying back shares, a move that has brought its outstanding share count to 201.10 million, down from 205.32 million last year.

The share buybacks continued in the last quarter when the management repurchased stocks worth over $215 million, a big increase from the $172.7 million it bought in the same period last year.

Data compiled by SeekingAlpha shows that the company has a forward price-to-earnings ratio of 19, much lower than the five-year average of 62. 

However, the company’s rule-of-40 multiple, which is a common approach used to value companies in the SaaS industry, shows that it is not a cheap company. Its forward growth rate is 7.5%, while its EBITDA and net income margins are at 9.65% and 9.08%. This gives it a rule-of-40 metric of less than 20%, much lower than the ideal 40%.

DocuSign stock price technical analysis 

The daily timeframe chart shows that the DOCU stock price has been in a strong downward trend this year. It dropped from the November high of $107.75 to the current $71.

DOCU has stalled at the 61.8 Fibonacci Retracement level at $71.45 and has formed a descending channel.

It remains below the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bears remain in control for now  

Therefore, the most likely outlook is where it continues falling, with the next key target being at $63.77, its lowest level this year and the lower side of the channel. A drop below that level will point to more downside, potentially to the support at $60.

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The S&P 500 Index has had a strong performance this year as it jumped to a record high several times. It has soared by 41% from its lowest level this year, and Wall Street analysts believe that the index and its ETFs, like SPY, VOO, and IVV have more upside in the coming years.

S&P 500 Index benefited from key tailwinds 

The S&P 500 Index soared this year as investors cheered several important tailwinds. 

The most important one was corporate earnings, which continued thriving this year. 

Data compiled by FactSet shows that constituents of the S&P 500 Index had strong earnings in the last quarter. The average earnings growth was worth 13%, which was higher than what analysts were expecting. It was the fourth consecutive quarter of earnings growth.

The S&P 500 Index also surged as the Federal Reserve started cutting interest rates. It has already slashed rates by 50 basis points, and analysts believe that this trend will continue in the final meeting of the year.

Additionally, the index and its ETFs recovered after Donald Trump implemented tariffs during the so-called Liberation Day. While the tariffs were stiff, the president and his team negotiated and brought most of them lower, with most of them coming in at 15%.

Companies have demonstrated resilience during this time, with many of them reporting strong earnings. For example, the GM stock price soared to a record high this week, even though it is one of the most affected.

Tariffs have also had a positive impact on the US economy, with estimates showing that they will help to reduce the public debt by over $4 trillion in the next decade.

Most importantly, the S&P 500 Index benefited from the ongoing AI tailwinds as top companies continued spending heavily. Indeed, a closer look at the top performers shows that most of them are companies in the AI industry, like Sandisk, Western Digital, Seagate, Micron, Palantir, and Lam Research.

Mergers and acquisitions have also returned, a trend that may continue in the coming year. Deals worth over $1 trillion have been announced recently, with Netflix being in talks with Warner Bros. Discovery. 

Some of the other large deals were the $48 billion buyout of Kenvue by Kimberly-Clark, the EA Sports buyout by a group of investors, and Union Pacific’s acquisition by Union Pacific.

Wall Street analysts are upbeat on US stocks

Experts believe that the stock market has more gains to go in 2026, with most of them anticipating a double-digit growth rate. 

If this happens, it means that it will be the seventh year of double-digit growth rates.

The average estimate among analysts is that the S&P 500 Index will jump from the current $6,857 to $7,500 in 2026.

This growth will be because of the upcoming interest rates by the Federal Reserve, which are expected to come down significantly next year. Trump has hinted that Kevin Hassett will be the next chairman, a notable thing since the two have similar views.

Earnings growth will also be resilient now that companies have adjusted to the new normal of Donald Trump’s tariffs. Also, analysts expect that the AI boom has more room to go.

Deutsche Bank analysts have an S&P 500 target of $8,000, while Morgan Stanley believes that the index will soar to $7,800.

UBS analysts have a target of $7,700, while JPMorgan, BNP Paribas, and Barclays see it rising above $7,500. In a recent statement, Tom Lee, the popular founder of FundStrat noted that the index has more upside.Still, there are potential risks, including the fact that the AI bubble may pop in 2026 and that the S&P 500 Index is not cheap.

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Nvidia stock price has moved sideways in the past few weeks as concerns about competition and growth continue. Still, technicals and its valuation metrics point to a resurgence in the coming weeks, potentially to a record high.

Nvidia stock price technicals points to a rebound 

The daily timeframe chart shows that the NVDA stock price has formed some notable bullish catalysts in the coming weeks.

It has remained above the 100-day Exponential Moving Average (EMA), a sign that bulls remain in control today.

The stock has formed a rising broadening wedge, which is commonly known as a megaphone pattern. It is now moved to the lower side of wedge pattern, a sign that it has started to bottom.

It is trading at the 23.6% Fibonacci Retracement level, while its oscillators like the Relative Strength Index (RSI) and the MACD have continued rising in the past few weeks.

Therefore, technicals suggest that the next key resistance level to watch will be the psychological level at $200. A move above that level will point to more upside, potentially to the all-time high of $212. 

However, the bullish outlook will become invalid if the stock moves below the lower side of the wedge pattern, which will point to more downside, potentially to the psychological level at $150.

Nvidia shares have become a bargain 

The recent Nvidia stock price pullback has been triggered by the rising risks of competition from American and Asian companies.

Most importantly, there are concerns that Google will become a major player in the GPU industry if it starts selling its chips to other companies, including the likes of Meta Platforms. 

OpenAI is also building its chips using Broadcom, a company whose market capitalization has jumped to over $1.7 trillion.

Other competition is coming from China, where companies like Alibaba and SMOC are building their own chips. Just today, Moore Threads, a Chinese competitor, soared by over 500% after going public.

However, these fears seem to be exaggerated as Nvidia has more years of experience in the industry, meaning that it may continue being the most dominant player in the industry. 

A good example of this is the fact that its growth has continued despite the soaring competition from AMD, which has developed GPUs that are almost as good as those made by Nvidia.

Nvidia stock price has also struggled as investors have remained concerned about the AI bubble and its circular investing approach, where it invests in companies that then use the money to buy its chips.

Still, the current data shows that Nvidia is doing well, with its revenue growth accelerating. Its most recent results showed that its revenue rose to over $55 billion, and the management believes that the fourth quarter will hit $65 billion.

Nvidia is also one of the most profitable companies in Wall Street, with its profit margins being 53%, higher than AMD’s 10% and Micron’s 23%. Palantir, a software maker, has a net profit margin of 28%.

Still, despite these numbers, Nvidia has a forward PE ratio of 38, much lower than the five-year average of 45%. It also has forward PEG ratio of 1.03, much lower than the sector median of 1.72%.

Nvidia has one of the best rule-of-40 metrics in Wall Street. It has a forward revenue growth of 65% and a net income margin of 53%, giving it a multiple of 118%. While the rule-of-40 largely applies to SaaS companies, Nvidia’s numbers show how strong it is today.

Therefore, Nvidia has numerous technical and fundamental catalysts that will likely help its stock recover and possibly blast past its all-time high.

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The JPMorgan Equity Premium Income (JEPI) ETF stock has done well this year as US shares have soared. It has soared to a record high of $57.50, up by ~21% from its lowest point this year. So, is the JEPI ETF a good buy or is the popular Vanguard S&P 500 ETF (VOO) better?

How the JEPI ETF works

JEPI is the biggest ‘boomer candy’ ETF with over $40 billion in assets under management (AUM). It is a blue-chip fund that aims to generate growth and income. 

It is an actively managed fund that uses two approaches. The management team invests in a basket of blue-chip companies, including popular names like Nvidia, Microsoft, and Google. It has 135 companies in its portfolio.

JEPI then uses the covered call approach to generate return. In this, the manager writes call options, which give it a right but not the obligation to buy the S&P 500 Index at a strike price before the expiry period. This options trade gives it a premium, which the fund distributes to investors every month. 

The dual approach ensures that the JEPI ETF stock rises when US equities are rising. It also makes it an income play, which explains why it has a dividend yield of 7.5%. 

However, the strategy has a major limitation, especially in a stock market bull run. In this period, the strike price is often passed, which limits the potential upside.

What is the VOO ETF?

The Vanguard S&P 500 ETF is a more straightforward fund in that it invests in the S&P 500 Index and is the biggest passive income ETF in the world. 

As a passive fund, VOO is much cheaper than JEPI in that it has an expense ratio of just 0.03%. This means that a $10,000 investment costs just $3 a year. JEPI has a ratio of 0.35%, meaning that a similar investment will cost $35. 

As a growth-focused fund, VOO has a low dividend yield of just 1.12%. In contrast, JEPI has a dividend yield of 7.50%, making it ideal for dividend investors.

VOO vs JEPI ETF: one is a better buy

VOO and JEPI ETFs have different goals. JEPI aims to provide a regular monthly income, which normally rises in periods of volatility. VOO, on the other hand, provides investors with a cheap approach to investing in the stock market. 

A closer look at the two funds shows that VOO is a better buy despite its lower yield. For example, JEPI’s total return in the last three years was 31%, while VOO has returned 78% in this period. 

The same has happened in the last 12 months as the VOO gained by 14.70%. JEPI rose by 3.86% in the same period. This year, JEPI is up by 7.75% against VOO’s 17.80%.

Historically, data shows that covered call ETFs underperform benchmark indices. For example, Nvidia stock has always done better than the 87% yielding NVDY. Similarly, the MSTR stock has lagged behind the 280% yielding MSTY ETF. 

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The blue-chip Schwab US Dividend Equity ETF (SCHD) has had a tough year as investors dumped value stocks for high-flying technology companies like Nvidia, Palantir, and Micron. 

The SCHD ETF has had a total return of just 4.68%, while the S&P 500 and Nasdaq 100 indices have jumped by 22% and 17%, respectively. This article explores why the SCHD ETF has disappointed this year and why the SPYI is a better fund. 

Why the SCHD ETF has disappointed

While the SCHD is a beloved ETF, its performance in the past few years has not been good. Its three-year return was just 20%, while the Nasdaq 100 and S&P 500 have returned 120% and 78%, respectively. 

This performance has coincided with the emergence of the AI industry and the surging investments. It has transformed the American investing landscape by creating several companies valued at over $1 trillion. 

Nvidia recently crossed the $5 trillion level, while Google is now approaching the $4 trillion level. Other companies like Palantir, Amazon, and Microsoft have all thrived in this period. 

In contrast, the SCHD ETF is mostly made up of companies in traditional industries. Energy is the biggest constituent, accounting for ~20% of holdings, which is notable as crude oil and natural gas have pulled back. Oil has dropped because we are in the era of abundance. 

Consumer staples, healthcare, and industrials are also big names in the SCHD ETF. Some of these companies have been impacted negatively by Donald Trump’s tariffs. 

The top companies in the SCHD ETF are top names like Merck, Amgen, Cisco, AbbVie, Coca-Cola, and Pepsi. All these are blue-chip names that have a record of paying dividends. However, their performance cannot match the performance of big tech names.

SPYI ETF is a better buy

For investors interested in dividends, the 3.77% yield that the SCHD ETF offers is not enough. Besides, investing in the low-risk government bonds offers a higher return.

Therefore, one of the top alternatives to consider is the NEOS S&P 500 High Income ETF (SPYI). SPYI is more expensive than SCHD thanks to its 0.68% expense ratio. 

However, history shows that it has a better performance than the SCHD over time. Its three-year return is 58% compared to SCHD’s 20%. 

The same divergence happened this year as the SCHD returned 4.98% compared to SPYI’s 15%. This performance is partially because SPYI has a dividend yield of 12%, which helps to compensate its high cost.

SPYI uses the covered call approach by first investing in the S&P 500 Index companies like Nvidia, Apple, Microsoft, and Alphabet. It then writes call options on the index, which gives its a monthly premium, which it uses to fund its dividend. 

The fund also uses other approaches to boost its returns. Most notably, it uses the tax loss harvesting approach, in which it uses losses in some investments to offset taxable gains. This approach explains why the SPYI ETF often beats other covered call ETFs like JEPI.

Ideally, the best ETFs to invest in are generic names like VOO and QQQ. These are all low-cost funds that have a long record of doing well. However, if you are interested in a boomer candy fund, SPYI is one of the most recommended among analysts.

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The IREN stock price has nosedived recently and formed a risky pattern that points to further downside. It dropped to $43 this week, down by over 40% from its highest point this year. So, is it safe to buy the IREN dip or does it have more downside to go?

IREN stock price technicals point to more weakness

The 12-hour chart shows that the IREN share price has slumped in the past few weeks, undoing some of the gains it made a few months ago. 

It has dropped from the all-time high of $76.85 in November to $43 today. As a result, it has slumped to the 50% Fibonacci Retracement level. 

Most importantly, the stock has formed a double-top pattern at $74 and a neckline at $48.40. A double-top is one of the most common bearish chart patterns in technical analysis.

It has already retested the neckline, completing a process known as a break-and-retest patttern in technical analysis. The Supertrend has already turned red and the 50-period and 25-period moving averages are about to cross each other. 

At the same time, the Relative Strength Index (RSI) and other oscillators have all pointed downwards. Therefore, the most likely scenario is where the IREN stock price continues falling as sellers target the 61.8% Fibonacci Retracement level at $32.50. 

On the flip side, a move above the resistance level at $48 will invalidate the bearish outlook. 

IREN stock chart | Source: TradingView

IREN faces major risks ahead

At face value, IREN’s business is thriving as its Bitcoin mining operation benefits from the rising hashrate. This growth will likely continue, albeit at a slower pace as the mining difficulty rises. 

Investors are not buying IREN because of its mining operations. Rather, the main catalyst is its artificial intelligence business, which has continued doing well and has a lot of promise. 

Like other Bitcoin mining companies, IREN is aiming to become a major provider of infrastructure to companies in the AI space. It is targeting hyperscalers like Microsoft and Meta, as well as other smaller companies.

The business model has been validated by other companies like Nebius and CoreWeave. It was also validated recently when it announced a large deal with Microsoft. In it, the company will receive billions of dollars in high-margin revenue for providing data center solutions.

IREN anticipates strong growth in the industry, with the management expecting its AI cloud revenue to get to $3.4 billion by the end of 2026. This is notable as the company made less than $10 million in revenue in the division in the last quarter.

Most of its $240 million in revenue in the last quarter came from its Bitcoin mining operations.

The main risk, however, is that the company is facing substantial competition from other companies in the Bitcoin mining operations that are embracing the technology. Notable names are TeraWulf and Bitfarms. It is also competing with companies like CoreWeave and Nebius.

The impact of all this is that hyperscalers like Microsoft, Google, and Meta Platforms have choices when it comes to finding partnering companies.

Meanwhile, there is a risk in terms of financing as the industry is prohibitively expensive. For example, the company announced that it would raise $2 billion to boost its infrastructure spending. This raising will be in the form of convertible debt and share offerings. 

Like CoreWeave, there is a risk that the company will report losses before its AI business breaks even. CoreWeave, the biggest name in the sector, reported a net loss of $110 million in the last quarter. It has lost over $823 million in the last four quarters.

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Adobe stock price has been in a freefall in the past few years as it continued to underperform the broader stock market. ADBE was trading at $325 today, Dec. 4, down by over 50% from its pandemic highs. Its market cap has dropped from $341 billion at its peak to $138 billion today. 

Adobe shares have crashed amid AI fears

Adobe, the creator of products like Photoshop, Illustrator, InDesign, and Premiere, has come under pressure in the past few years as investors have predicted that its business will be disrupted by artificial intelligence (AI) technology. 

The view among analysts is that users will be able to use AI tools instead of some of the products offered by Adobe. For example, its now possible for companies and individuals to use AI tools like ChatGPT to create and polish photos instead of Photoshop.

Still, there are signs that these fears are unfounded as the company has continued doing well, experiencing double-digit growth, with most of it being organic. 

The most recent results showed that the company’s revenue rose by 10% to $5.99 billion, while its earnings-per-share (EPS) rose to $4.18.

Adobe’s Digital Media business recorded a revenue of $4.46 billion, up by 11%, with its AAR soaring to $18.59 billion. Similarly, the Digital Experience Performance revenue rose by 9% to $1.48 billion, with its subscriptions hitting $1.37 billion. 

Adobe’s profitability continued to grow in the third quarter, with its net income hitting $1.77 billion. Its profit was much higher than the $1.68 billion it made in the same period last year. 

Analysts are still optimistic that Adobe’s business will continue doing well in the coming years. The average estimate among analysts is that the upcoming revenue will come in at $6.1 billion, up by 8.9% from the same period last year. 

They also expect the annual report to show that its revenue rose by 10.16% to $23.69 billion. It will then make $25.87 billion in the coming year. 

These estimates don’t include SEMRush, which the company acquired recently in a $1.9 billion deal, with the deal expected to close next year.

ADBE is highly undervalued

The ongoing Adobe stock price crash has left behind a company that is severely undervalued. Data compiled by SeekingAlpha shows that it has a forward price-to-earnings (PE) ratio of 19.50, much lower than the sector median of 31. 

On a non-GAAP basis, the company has a forward P/E ratio of 15, lower than the sector median of 23.68. Its forward PEG ratio of 1.09 is also lower than the median of 1.70. 

The company also has an attractive rule-of-40 metric. Its net income margin is 30%, while the forward revenue growth is 10%, giving it a multiple of 40%. This means that, from a fundamental perspective, the company is a bargain. 

Adobe stock price technical analysis 

The daily chart shows that the ADBE stock price has crashed in the past few months. It has remained below all moving averages, a sign that bears remain in control.

The stock has formed a falling wedge pattern, which is comprised of two descending and converging trendlines. This pattern is one of the most common bullish reversal signs in technical analysis.

Therefore, the most likely scenario is where the ADBE stock price rebounds, and possibly hit the psychological point at $400, which is about 22% above the current level. 

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The crypto market is going down today, with Bitcoin falling by 1.25% in the last 24 hours, and XRP, Solana, Dogecoin, and Hyperliquid (HYPE) falling by over 3%. The market capitalization of all tokens dropped by 1.36% to $3.15 trillion. Here are some of the reasons why the crypto market crash is happening today.

Crypto market is going down as investors sell the news 

One key reason why the crypto market is going down is that there was some important news that pushed it higher. Wl

The most important news was that Vanguard, a top company with over 11 trillion in assets and 50 million customers, will start off offering crypto ETFs, a major change for the company. It has already started offering some of these funds.

The other notable news was that Donald Trump hinted that he would nominate Kevin Hassett to be the next Federal Reserve Chair, replacing Jerome Powell. 

Hassett is viewed positively by crypto traders because he used to serve as a Coinbase advisor. He also favors low interest rates and is more aligned with Donald Trump on key issues.

Meanwhile, the Securities and Exchange Commission (SEC) approved the spot Chainlink ETF, which has attracted millions of dollars in inflows in the past few days.

Additionally, Charles Schwab announced that it would start offering crypto trading services on its platform in January, a notable thing for a company with over $12 trillion in assets. 

All these news events helped to push crypto prices higher this week. Whenever this happens, traders often sell the news as they wait for an additional catalyst.

Futures activity is falling 

The other main reason why the crypto market is going down is that activity in the futures market has started to deteriorate in the past few days.

One way to look at this is the futures open interest, which is an important metric that looks at open positions in the futures market. These positions can be with call or put options.

Data compiled by CoinGlass shows that the futures open interest has dropped by 1.87% to $132 billion. Similarly, the 24-hour liquidations dropped by 27% to $267 million.

Therefore, the falling open interest means that investors have reduced their leverage, which means that demand has waned in the past few days.

Fear and Greed Index is in the fear zone 

Meanwhile, there is a sense of fear in the market despite the recent recovery in the industry. Data shows that the closely-watched Fear and Greed Index has remained in the fear zone this week.

The index has moved from last month’s extreme fear zone of 8 to the fear area of 25. In most cases, crypto prices tend to underperform when there is fear in the market and then continue rising when it moves to the greed zone.

Federal Reserve interest rate decision anticipation

The other main reason why the crypto market is going down is that investors are now anticipating the final interest rate decision of the year.

Economists expect that the bank will cut interest rates by 0.25% in this meeting now that the labor market is showing cracks. 

What is unclear is on the guidance of what to expect in the next meetings. It is common for top financial assets to remain in a tight range or pull back ahead of the Fed decision. This also explains why the top stock market indices like the Dow Jones and S&P 500 remained under pressure this week.

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Ulta Beauty stock surged by over 6% in the extended hours after the company published strong financial results, which demonstrated resilient demand in the industry. It rose to $566 from the closing price of $533, and is now about 83% from its lowest level this year.

Ulta Beauty’s business is doing well 

Financial results released on Thursday showed that the beauty product retailer, which Warren Buffett invested in last year is doing well in a difficult environment.

Ulta Beauty’s revenue rose by 12.9% last quarter, partially helped by the Space NK acquisition and the openings of new stores. A double-digit revenue growth for a company in its industry is a good thing as it shows that demand is resilient.

Ulta Beauty’s comparable sales rose 6.3%, while its gross profit rose 14.9% to $1.2 billion. This figure was ~40.4% of its revenue, higher than the previous 39.7%.

Ulta Beauty’s growth has been good this year, with the nine-month revenue rising by 8.8% to $8.5 billion, and its net income falling to $796 million. The profit was lower than last year because of the Space NK buyout and a 15.1% increase in its expenses. The CEO said: 

“Exciting assortment newness, improved in-store and digital experiences, and bold marketing efforts are resonating with our guests and drove strong sales results, market share gains, and growth across all categories and channels.”

Ulta continued with its share repurchase program, that has seen it reduce its outstanding shares by over $693 million. Data shows that the company has 44.8 million outstanding shares, down from 55 million in 2021, a move that has pushed its EPS much higher.

However, there were some notable headwinds in this report. One of them was that its inventories rose by 16% to $2.7 billion. The management pointed to the new store openings and the Space NK acquisition. In most cases, a surge in inventories is usually a major headwind for a company.

Another major headwind is that the company’s short-term debt rose to $551 million from $199 million in the second quarter.

The management expects that Ulta Beauty’s business will continue doing well, with the net sales expected to be $12.3 billion, higher than the upper side of the previous range at $12.1 billion.

It also expects that the operating margin will be between 12.3% and 12.4%, higher than the previous estimate of between 11.9% and 12%.

Ulta Beauty stock price technical analysis 

The weekly chart shows that the Ulta Beauty stock price has held steady in the past few months, moving from a low of $308 in March to a high of $572 this year.

Ulta shares have remained above all moving averages, and has slowly formed a cup-and-handle chart pattern, which often leads to more upside over time. It is now trading at the shoulders section.

Therefore, the stock will likely continue rising as bulls target the important resistance level at $600. 

The bullish Ulta stock price will become invalid if it drops below the important support at $492. 

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The Dow Jones Index held steady this week and is hovering near its all-time high as investors refocus on the upcoming Federal Reserve interest rate decision and key earnings by Adobe, Oracle, and Costco. 

It was trading at $48,000, its highest level since November 13, and is slowly forming a risky pattern. Will the rally continue or will the blue-chip index pull back?

Dow Jones Index is slowly forming a bearish setup 

The daily timeframe chart shows that the Dow Jones Index has been in a strong uptrend in the past few months, moving from a low of $36,612 to $48,000 today, a 30% surge from its lowest level in April this year.

The index has remained above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls remain in control today. It has also moved above the Ichimoku cloud and the Supertrend indicators.

The risk, however, is that the stock has formed a bearish divergence pattern as the Relative Strength Index (RSI) and the MACD indicators have continued moving downwards.

At the same time, the index is slowly forming a double-top pattern at $48,375 and a neckline at $45,705. A double-top is one of the most common bearish reversal patterns in technical analysis. 

Therefore, there is a risk that the index will have a pullback in the coming days or weeks. This bearish outlook will remain intact as long as it remains below the double-top point at $48,375. 

On the flip side, a move above the double-top pattern level will point to more gains, potentially to the next key resistance level at $50,000 in 2025.

Federal Reserve and key earnings by Oracle and Adobe are key catalysts

The Dow Jones Index has a major bullish catalyst in that the Federal Reserve will conclude its two-day meeting on Wednesday next week and deliver its interest rate decision.

Most economists believe that the bank will deliver the third interest rate cut of the year, with these odds rising to over 90% on Polymarket and Kalshi. These rising odds explain why the yield of the 10-year government bonds has dropped to 4.1% from the year-to-date high of 4.805%.

Most importantly, the hope is that the Fed will deliver more cuts in the coming year as Donald Trump is set to replace Jerome Powell as the Federal Reserve chair, possibly with Kevin Hassett. Hassett, who serves at the White House, is more aligned with the president on rate cuts.

The other notable catalyst for the Dow Jones Index next week will be financial results from top companies Toll Brothers, AutoZone, Oracle, Adobe, Synopsys, Broadcom, Costco, and Lululemon. 

While these companies are not part of the Dow Jones Index, their earnings will have an impact on the stock market. The most important one will be Oracle, the software giant that has become a major player in the artificial intelligence industry. 

Oracle’s recent results had a direct impact on the Dow Jones and other indices as it published strong numbers and backlog. Adobe stock price will also be in the spotlight as it continues to lag behind in the growing AI industry.

The Dow Jones Index will also react to the upcoming macro numbers, including the JOLTS job cuts and inflation report.

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