DJIA daily outlook – Risk sentiment a risk of oil price drop

FX:US30   Index of top 30 shares on Wall Street
Dow Jones index rose to a high of 17,179 levels before falling into the red and closing the day on a weaker note at 17,668 levels. As noted in yesterday’s outlook, the probability of the index forming head and shoulder remains intact as long as 17,580 (Friday’s low) remains intact.

However, the risk of a bearish break below 17,580 is high today, given both oil             benchmarks show a head and shoulder breakout.

The bearish pattern indicates prices could drop towards $41.89 and if so could have a negative impact on risk sentiment.

DJIA Technicals

Daily Chart – bearish MA crossover on hourly charts

Weakness today could lead to a bearish crossover between hourly 100-MA and 200-MA and add credence to bearish crossover between 50-MA and 200-MA seen on Friday.

In such a case, prices could drop to 17,600 – 17,565 (daily 100-SMA).

On the higher side, a break above hourly 200-MA could yield a re-test of 17,900-17,950 levels.
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