The Dow Jones 30 (US 30) index is creating a sideways channel with an upper boundary the 24,913 resistance and lower boundary the 22,900 support. The index is still developing above the 50-day simple moving average (SMA), however, the MACD oscillator is flattening in the positive region and the RSI is approaching the neutral region, endorsing the neutral mode in the short-term.

Should the index make another run lower, it’s likely to meet support at the 50.0% Fibonacci retracement level of the downward wave from an all-time high at 29,582.61 to the 40-month trough of 18,145. A successful break below this key support area would open the way for 23,322 and the 22,900 area, which coincides with the 50-day SMA. A break below this crucial line could open the way for the 38.2% Fibonacci of 22,518.

On the other side, an increase above the upper surface of the range of 24,913, could see the price move towards the 61.8% Fibonacci of 25,214 ahead of the 100-day SMA at 25,482. Above that, the 200-day SMA currently at 26,371 could attract traders’ attention before flirting with the 27,091 – 27,324 resistance area.

In the bigger picture, the Dow Jones 30 index would need to make a sustained climb above the 100-day SMA in order for the outlook to become convincingly bullish.


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This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Source: XM

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