Don’t look now, however the Dow Jones index is inching near its channel prime!
Will sellers bounce again in and power the downtrend to renew?
Listed below are the short-term ranges I’m watching.
Dow Jones Industrial Common (DJIA) 1-hour
This fairness index has been cruising inside a descending channel with its decrease highs and decrease lows.
Can the selloff keep on?
One other check of resistance appears to be underway, and it’s shaping as much as be a great quick alternative. In any case, this channel has been holding for practically a month already, and I’m seeing a confluence of inflection factors on the prime.
Not solely does the channel resistance line up with the 61.8% Fibonacci retracement degree, nevertheless it additionally coincides neatly with the 100 SMA dynamic inflection level!
On the identical time, technical indicators are in settlement that the downtrend may acquire traction from right here.
The 100 SMA is beneath the 200 SMA to sign that the trail of least resistance is to the draw back or that the ceiling is extra prone to maintain than to interrupt. To prime it off, the hole between the transferring averages is widening to point strengthening promoting stress.
Additionally, Stochastic is reflecting overbought circumstances or exhaustion amongst patrons. Turning decrease would verify that sellers are stepping up their sport and will take the index again all the way down to the swing low or the channel help.
A return in risk-off flows could be sufficient to maintain this inventory index on the decline. Nonetheless, higher keep looking out for headlines that may revive traders’ threat urge for food since this might spur a reversal from the slide.
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