Chart of the week – Dow Jones Industrial Average (US 30)
Short-term technical analysis (1 to 3 weeks)(click to enlarge chart)
Time-stamped: 21 August 2022 at 12:30pm (SGT)
Source: CMC Markets
- The recent two-month rally of 16% seen in the US 30 Index (a proxy for the Dow Jones Industrial Average) from its 52-week low of 29,649 printed on 17 June 2022 to its recent high of 34,285 on 16 August 2022 has run into a roadblock coupled with the emergence of several bearish elements from a technical analysis perspective.
- Hence, exhaustion and fatigue may be around the corner for the bulls. Bearish bias below 34,600 key medium-term pivotal resistance for a potential drop towards the following supports at 33,300 and 32,580.
- On the flip side, a clearance with a 4-hour close above 34,600 put the bearish tone on hold for a squeeze up towards the next resistance at 35,230/380 (29 March/21 April 2022 swing highs & 76.4% Fibonacci retracement of the last major downtrend phase from 5 January 2022 all-time high to 17 June 2022 low).
- Negative elements; last Friday’s price actions ended with a weekly bearish “Gravestone Doji” reversal candlestick pattern after a failure to close above the 50-week moving average that has capped previous rallies since April 2022, Elliot Wave/fractal analysis has indicated that the two-month rally has reached an inflection zone of 34,300/600 which increases the odds of a bearish reversal, short-term downside momentum has resurfaced from the negative observations seen in the 4-hour RSI oscillator as it has flashed a prior bearish divergence signal at its overbought region coupled with a recent bearish breakdown from its corresponding support at the 50% level.
Disclaimer: CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.