ICmarkets
Long

Interesting price action on the DOW...

FX:US30   Index of top 30 shares on Wall Street
91 0 0
Weekly gain/loss: + 957 points
Weekly closing price: 18841
Weekly opening price: 18841

Weekly view: During the course of last week’s session, US equities tapped the yearly opening level at 17554 and ended the week closing over 950 points in the green! Impacted largely by Trump’s presidential win over Clinton, the index closed the week out above a trendline resistance drawn from the high 18365 and clocked fresh highs of 18891. As far as we can see, there is very little stopping the unit from stretching higher this week. Should we encounter a pullback, nonetheless, the first port of call will be the recently broken trendline resistance, now acting support.

Daily view: Technically speaking, there’s very little difference between the weekly and daily chart . Perhaps the most compelling factor is that should price pullback this week, the next downside target on this scale falls in at 18636: a broken Quasimodo line.

H4 view: In our opinion, the overall tone remains biased to the upside. And with that in mind, we have three noted areas of interest this morning. The first, the lowest of the three, comes in at 18548-18604: a H4 demand which was formed following the break of the daily Quasimodo resistance level at 18636. The second, the middle of the three is seen at 18629-18683: a H4 demand base that intersects beautifully with the aforementioned weekly trendline support, boosting its appeal for longs. And the third area drawn from 18740-18801, which, again, is a H4 demand barrier, unfortunately has little higher-timeframe significance so is, in our book, liable to be faked should price reach this low.

Direction for the week: We see absolutely very little standing in the way of a further push to the upside this week.

Direction for today: Our desk is anticipating a pullback in price to either of the above said H4 demand areas. Granted, this may not come to fruition today, but when/if it does, it’s best to be prepared!

Our suggestions: The two lower H4 demands are stable enough zones to consider entering at market given their connection with the higher timeframes. The upper area, while it has no connection to the bigger picture, could still react. However, we’d advise waiting for at least a H4 bullish close to form prior to pulling the trigger here to avoid the possibility of getting caught on any fakeout.

Levels to watch/live orders:

• Buys: 18740-18801 (reasonably sized H4 bullish close required prior to pulling the trigger, stop loss: ideally beyond the trigger candle). 18629-18683 (a possible area to consider entering at market from, stop loss: 18618). 18548-18604 (a possible area to consider entering at market from, stop loss: 18537).
• Sells: Flat (stop loss: N/A).
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