Dow Jones Technical Analysis

Yesterday, the Dow Jones finished the day positive
as the lack of bearish catalysts continues to support the market. In fact, the
path of least resistance remains to the upside as growth and employment stay
resilient, and the Fed continues to signal three rate cuts this year even if
inflation reaccelerates a bit.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones is
trading inside a rising channel and continues to diverge with the
MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. From a risk management perspective, the buyers will have a much
better risk to reward setup around the lower bound of the channel where they
will also find the red 21 moving average for confluence. The
sellers, on the other hand, will want to see the price breaking lower to
position for a drop into new lows with the base of the channel at 37128 being
the ultimate target.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the
price recently bounced on the previous resistance turned
support where we had also the confluence with the red 21
moving average. The buyers stepped in to position for a rally into the upper
bound of the channel. The sellers, on the other hand, will want to see the
price breaking below the lower bound of the channel before even considering
going short in this market.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with bounce on the support and the strong rally
afterwards. There’s not much else to glean from this chart as there is no good
entry point anymore. If the price were to pull back again though, the buyers
will likely pile in around the lower bound of the channel, where they will have
a much better risk to reward setup.

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This article was written by FL Contributors at www.forexlive.com.