45,000 or Bust: Dow Faces Familiar Resistance Test45000 and Dow Jones bulls have not been the best of friends over the past year, with the index repeatedly rejected at the level going back to November after the Presidential election. But that hasn’t been enough to deter the bulls from having another crack, with the price back knocking on the door again following the latest rally.
RSI (14) is trending higher but not yet overbought, signalling a bias in the same direction. MACD has just confirmed the bullish signal, crossing the signal line from below in positive territory.
Combined, the price action and momentum picture suggests that if we see another attempt on the level, the move may well stick.
If we see a clean break above 45000, consider initiating longs with a stop beneath for protection. A close above 45000 would be preferred given how many times the price has failed at the level. Rather than nominate a specific target, big figures and watching for obvious reversal patterns may provide guidance on when to exit the trade.
If the bulls fail again, 45000 has proven to be a rich hunting ground for bears over the past year. Shorts can be established beneath the level with a stop above for protection. 44500, 43822 and the Aug 1 low of 43332 are possible targets depending on desired risk-reward.
Good luck!
DS
