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Dow Jones, S&P 500 Technical Analysis: Sellers Struggle to Lead the Price

Dow Jones, S&P 500 Technical Analysis: Sellers Struggle to Lead the Price

2019-08-13 14:35:00
Mahmoud Alkudsi, Market Analyst
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S&P 500, Dow Jones Outlook

  • Dow Jones, S&P500 charts and analysis

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Dow Jones - S&P500 – Market’s Indecision

On August 5, S&P 500 declined and printed 2,777- its lowest level in seven months. However, the index recovered during the week the big majority of its losses then closed the weekly candlestick with a long legged Doji pattern, signaling indecision about the price direction. Similarly, the Dow closed with the same Doji pattern.

Alongside this, the Relative Strength Index (RSI) remained flat around 40 on the Dow and the S&P 500 reflecting the buyer’s lack of momentum to push the price higher.

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Dow Jones PRICE Daily CHART (Oct 25, 2017 – AUg 13, 2019) Zoomed OUT

Dow Jones, S&P 500 Technical Analysis: Sellers Struggle to Lead the Price

Dow Jones PRICE Daily CHART (April 20 – Aug 13, 2019) Zoomed IN

Dow Jones, S&P 500 Technical Analysis: Sellers Struggle to Lead the Price

Looking at the daily chart, we notice yesterday the Dow pressed to the lower trading zone 25,700 – 25,870. However, the index failed to close below the high end.

Today, the index dropped to the aforementioned trading zone. Hence, a close below the low end could send the price towards 25,440. Although, the weekly support levels underlined on the chart (zoomed in) need to be kept in focus.

Further close below 25,440 could lead the price towards 25,215. The weekly support levels underscored on the chart would be worth monitoring.

It’s worth noting the divergence between the current downtrend and the volume. This reflects an aggressive new short selling and may increase the odds that the downtrend may continue.

On the other hand, any failure to close below the low end of the zone could push the price to the high end. See the chart to know more about the higher trading zone/s with the weekly resistance levels buyers would face in a further bullish scenario.

Having trouble with your trading strategy? Here’s the #1 Mistake That Traders Make

S&P500 PRICE CHART (DEC 20, 2018 – Aug 13, 2019) Zoomed out

Dow Jones, S&P 500 Technical Analysis: Sellers Struggle to Lead the Price

S&P500 PRICE Daily CHART (May 10 – AUG 13, 2019) Zoomed IN

Dow Jones, S&P 500 Technical Analysis: Sellers Struggle to Lead the Price

Looking at the daily chart, we notice yesterday the S&P 500 tumbled to the lower trading zone 2,862 – 2,912. Currently, the index eyes a test of the low end of this zone.

Thus, a close below the low end could send the price towards 2,791. Although, the weekly support levels marked on the chart (zoomed in) should be monitored closely. See the chart to know more about the lower trading zone with the weekly support sellers would encounter in a further bearish move.

On the flip-side, if the price fails to close below the low end of the zone, this could push the index for a test of the high end. Further close above the high end may see the index even higher towards 2,965. Nonetheless, the weekly resistance levels underlined on the chart should be considered.

Written By: Mahmoud Alkudsi

Please feel free to contact me on Twitter: @Malkudsi

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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