Yesterday’s post noted how crucial the 1400 level was for S&P and how DJI was pushed downwards by the rejected resistance in the weekly chart. Today we focus on DJI and see where it bottomed yesterday and what it needs to break in order for bulls to have a great new year start.
Dow at the above weekly chart has found support at the 200 EMA. From a low at 12883 at the open, prices managed to close at 13104, closing above the EMA (12950). In the following chart, you can see that DJI bottomed exactly at the lower pitchfork and now tries to get past the upper pitchfork resistance (13160). For the entire decline from 13365 to be a correction, prices now must continue rising in an impulsive pattern. As mentioned earlier the first important resistance is 13160-13200 area where the upper pitchfork coincides with the 61.8% retracement. If this resistance is broken in an impulsive wave, then the next crucial target is 13365.
Taking a closer look at the weekly chart we posted at the beginning of this post, yesterdays big up move has pushed DJI back up to test the broken purple support line. At a weekly level, it needs to move back above it and try at least a test at the longer term pitchfork resistances at 13200 and 13350, which are the same resistance levels as explained in the intraday chart above.
If you need more help trading this index and you like my analysis, don’t hesitate to contact me and ask about our new premium services that we are going to offer very soon. As always, thank you for taking the time to read my post and I wish you all a happy new year!!!