Dow outlook – Falling channel at risk of being breached
Resistance – 17,758, 17,811 (Apr 1 high), 17,934 (May 10 high)
Support – 17,638, 17,539 (23.6% of Feb low-Apr high), 17,418 (May 18 low).
Daily chart pattern – Falling channel
Support – 17,638, 17,539 (23.6% of Feb low-Apr high), 17,418 (May 18 low).
Daily chart pattern – Falling channel
- Sharp rally seen yesterday pushed up RSI back above 50.00. Given the futures are trading 70 points higher, the index is likely to open around 17,758 (channel resistance).
- Further gains towards 17,811 cannot be ruled out as risk sentiment is likely to stay intact (Greek crisis is out of the way).
- However, note that Greek deal also means one less hurdle in the way of Fed rate hike. The 2-yr treasury yield is above 0.90% and could near 1% and thus weigh over equity markets.
- Rejection/Failure to sustain above 17,758 (channel resistance) followed by a break below 17,638 could trigger fresh selling in the markets.
