Dow Jones 30 index (US 30) may be poised for a pullback, but still positive overall.
The Dow Jones 30 index has remained in a bullish mode in recent weeks, printing higher highs and higher lows on the daily chart while also staying above both it’s 200- and 50-day simple moving averages (SMA). This implies that the short-term picture remains positive, albeit cautiously so, with a break above the all-time high of 26,951 needed to confirm that the bulls are in full control.
However, short-term momentum oscillators suggest that a pullback may be on the cards in the immediate term. The RSI met resistance near 70 and has turned lower, while the MACD is currently testing its red trigger line, and if it dips below it, that would be a bearish signal.
In case of a correction lower, preliminary support may be found near the crossroads of the 200-day SMA at 25,051 and the 24,860 level, which halted the decline on February 8. A clear break below this area would turn the bias to neutral, from cautiously positive currently, and could set the stage for a test of 24,300.
On the other hand, if the bulls retake control, immediate resistance could come around 25,630, which capped the rally on February 13. If buyers pierce above that, the next obstacle may be the December 3 high of 26,080.
In short, the RSI and MACD suggest a bearish correction may be due, but as long as price action remains above the crossroads of the 200-day SMA and 24,860, the outlook remains cautiously positive.
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