I have not posted US Dow Jones stock market trend for quite a long while since June. And I am sure you know that US Dow Jones has been going upwards in the past 4 months as the world economy is recovering.
There are lots of enthusiasm in the economy recovery, and US Dow Jones has therefore been running upwards.
However, if comparing to many other emerging markets, US Dow Jones has been lagging behind the BRIC.
Is Dow Jones Upwards Momemtum Sustainable?
The question many people like to ask now is whether the bull market is sustainable on Dow Jones. Let’s take a look at the Dow Jones chart and analyse it using Technical Analysis.
If you look at the price action now, the upward channel is still valid, price is still moving above all the major moving average lines, therefore the price upward momemtum is still valid.
Volume is reducing, which can form a possible volume divergence, we just need to monitor closely for a possible trend reversal.
Looking at the indicators, MACD is trending in the positive region, suggesting a upward trend. The MacD histogram is reducing suggesting a possible short term correction.
RSI has been trading above 40%, suggesting the bull trend is still valid.
Stochastic is showing oversold in the market. A short term correction is possible.
In summary, the price and indicators all show that the long term upward movement is still intact as of now. Though there is a possible of short term correction and volume divergency may further suggest a possible trend reversal.
Given all this information, I will be willing to go in long at the moving average support to bet the market is continuing its upward movement with a stop loss at 5% below the support.
Dow Jones Stock Market Trend Nov 24, 2009
DISCLAIMER: This information is used for learning purposes only. It does not constitute an offer or solicitation to buy or sell. You should do your own analysis on top of my postings.
