Daily Timeframe: The shows that no further decline was seen yesterday. We were initially expecting price to trade down towards a fresh daily decision-point demand area at 16895-16997 before a move higher to 17362 was seen. In order for us to be convinced that the DOW will rally, price will need to close above 17362, and successfully retest it as support, only then would we consider buying into this index. Let’s take a look at the 4hr-timeframe picture to see if there are any short-term opportunities to take advantage of.
4hr Timeframe: The 4hr timeframe presents a similar picture to that of the . A break above 17362 would likely open the gates for price to challenge a 4hr supply area coming in at 17567-17510. However, we would only consider buying once 17362 has been successfully retested with confirmation as support.
Assuming that a break and retest does happen, we would not only be targeting the aforementioned 4hr supply area, but also the 4hr supply area seen above at 17815-17767. The reason why is simply because we believe the closest supply area has already likely been weakened from the spike on the 12/12/14 at 17562 seen marked with a blue arrow.
Given the points made above, we are more than happy to sit on the side lines for the time being, but at the same time know that we are ready to pull the trigger if a break and confirmed retest of 17362 is seen.
Current buy/sell levels:
• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).