Dow Jones Eyes Extending its Losses, Where Could the Selloff Stop?
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Dow Jones Technical Analysis
- Dow Jones rebounded from multi-month low
- Bearish signals on Dow Jones chart
Dow Jones Price – Bears in Charge
On Friday, bears pressed the Dow Jones to 24,688 -its lowest level in nearly seven months. The market rallied after as some of them seemed to cover, then closed the weekly candlestick in the red with 11.3% loss.
Alongside that, the Relative Strength Index (RSI) remained moving in oversold territory emphasizing the strength of downside momentum.
Dow Jones PRICE Daily CHART (Oct 1, 2018 – MaR 2, 2020) Zoomed OUT
Dow Jones PRICE Daily CHART (AUg 8 – MaR 2, 2020) Zoomed IN
Looking at the daily chart, we notice that on Monday, the Dow Jones opened with a breakaway gap to the downside, then closed below the 50-day average providing two bearish signals. On Thursday, the market abandoned the uptrend channel originated from the June 2 low at 24,600 generating more bearish signal ,see the chart (zoomed out).
This week, the Dow opened with a runaway gap indicating that downside move has not finished. Yet, the price remained in current trading zone 24,877 – 25,740.
Thus, close below 24,600 could encourage bears to press towards 24,214. Further close below that level may lead to more bearishness towards 23,494. In that scenario, the weekly support levels and area marked on the chart (zoomed in) should be considered.
On the other hand, any close above the high end of the zone reflects bears hesitation. This could lead them to ease up further allowing the price to rally towards 26,713. That said, the daily resistance level underscored on the chart would be worth monitoring.
Dow Jones Four Hour PRICE CHART (Feb 23, 2018 – MaR 2, 2020)
Looking at the daily chart, we notice that on Friday current downtrend move slowed down as some bears exited the market causing the price to rally towards 25,753.
Hence, a break above 26,026 could cause a rally towards 26,416. Although, the daily resistance level marked on the chart should be kept in focus. In turn, a break below 24,547 may resume bearish price action towards 24,374. Nevertheless, the weekly support level printed on the chart should be watched closely.
See the chart to find out more about the key technical levels in a further bullish/bearish scenario.
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.