Charting Outlook: Breakdowns signal Dow correction starting
19:00, 28 December 2016
· By CMC Markets
The US30 staged a major rally up off its election overnight low near 17,500 mounting a huge charge on 20,000 in the process becoming extremely overbought. In recent weeks, however, the rally has faded with an ascending triangle accumulation pattern offset by a negative RSI divergence.
This week, the US30 has started to break down with the index taking out uptrend support near 19,900 and falling toward 19,825 while RSI falling back under 70 signals a correction getting underway. Next potential support appears near 19,615 then 19,395 a 23% Fibonacci retracement of the post-election rally.
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