DOW JONES invalidating bearish patterns, targeting 34000 again.

The Dow Jones Index (DJI) closed yesterday above its 1D MA50 (blue trend-line) as it is extending the rebound we called on our previous analysis:


As you see, that rebound came exactly on the Higher Lows trend-line that started on the June 17 Low and was the second (July 14 the first) time it held, making it the short-term Support. What Dow achieved with that 1D candle close above the 1D MA50, is to invalidate the February 24 - April 28 2022 fractal, which by that time was similar but failed to break and close above its 1D MA50 and eventually got sold aggressively.

What makes the current rebound potentially having a long-term effect is 1) the 1D RSI rebound on its multi-year Oversold Zone and 2) the Bullish Cross on the 1D MACD, which within 2022 always delivers at least a +8% rebound. Such % rise would be the test of the 1D MA200 (orange trend-line), which is our medium-term target. As mentioned numerous times before, in order to commit to long-term buying we would like to see the index close above the 1D MA300 (yellow trend-line) first, which provided the rejection on the August 16 High.

So far the medium-term trading strategy is to buy every pull-back on the Higher Lows trend-line/ RSI oversold zone. A break below that level, we'll consider a bearish signal, targeting the 1W MA200 (red trend-line).



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