Dow Jones Technical Analysis

Last week, the Dow Jones finished on a positive
note as the lack of bearish catalysts kept the market supported. Today, the
futures market opened higher following the good PCE report last
Friday when the market was closed for holidays. Therefore, we can expect to see
a positive gap at the open. Overall, the path of least resistance remains to
the upside with the main two risks for the bullish sentiment being a
reacceleration in inflation leading to a hawkish Fed or a hard landing.

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
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 will likely lean on the top trendline to
position for a drop back into the bottom trendline targeting a break below it.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price trades right around the all-time high and we might see the market open
higher today as the futures market gapped up at the open following the good PCE
report last Friday. Aggressive buyers could pile in immediately to target an
extension into the upper bound of the channel and fold as soon as the price
falls back below the 39886 level waiting to buy the dip around the lower bound
of the channel.

Upcoming Events

This week we get the release of many key economic data.
We begin today with the US ISM Manufacturing PMI. Tomorrow, we have the US Job
Openings. On Wednesday, we get the US ADP and the US ISM Services PMI data. On
Thursday, we will see the latest US Jobless Claims figures, while on Friday we
conclude with the US NFP report.

This article was written by FL Contributors at

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