ICmarkets

DOW 30: Technical outlook and review.

FX:US30   Dow Jones Industrial Average Index
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Weekly Timeframe: The weekly timeframe shows that for five consecutive weeks, price has been hovering above an ignored weekly Quasimodo level at 17135. In the event that this level fails, follow-through selling will likely be seen down towards a weekly support level coming in at 16051.

Daily Timeframe: After looking at the daily-timeframe picture, we feel it is very likely price will test the ignored weekly Quasimodo level sometime soon, due to the fact yesterday’s trading action saw the sellers breach 17362, which was in effect a key obstacle to a move towards this weekly level. It will be interesting to see what the 4hr timeframes has to say about this.

4hr Timeframe: Recent developments show:

• Price did indeed continue rallying north from the 4hr demand area at 17248-17344 towards the 4hr supply area at 17638-17537, as reported may happen in the previous analysis.

• Weakness is currently being displayed within the aforementioned 4hr demand area.

With all of the above taken into consideration, from the weekly down to the 4hr timeframe, everything is pointing to a possible move south towards a 4hr decision-point demand area at 17084-17150, which if you look to left, beautifully surrounds the aforementioned ignored weekly Quasimodo level. Therefore with this in mind, we have absolutely no interest in buying this index at the moment. While selling on the other hand will only be considered if price breaks below the aforementioned 4hr demand area and successfully retests the area as resistance. In the event that the above does take place; a take-profit target will be set at 17159.

On a side note, assuming that we take full profits here, we’ll then switch our attention to begin looking for long opportunities since we’d then be trading around heavy-weight demand (see above – weekly), as per the red arrows.

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).

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