In my last post of US Stock Market Trends on May 22, I noted that the Dow Jones was supported by 50d MA. However, it broke the 50d MA and went down further, however, it was eventually supported well by the 100d MA and rebounded with 3 days of white candle consecutively.
What’s the outlook for the coming week if we practice technical analysis?
50d MA was earlier acted as the support, support turns resistance in rebound and therefore, Dow Jones is now testing the 50d MA resistance. If the market is riding on the momemtum and breaks the 50d MA resistance, you will need to monitor the 200d MA resistance, if 200d MA is broken, then it is likely the market has completed the correction and will be trending higher.
Note that 200d MA is a stubborn resistance, Dow tested twice and it did not manage to break the strong resistance. So, you must monitor it well. If you have an open position, remember to put your trailing stop near the 200d MA or you can also consider to take a profit first and re-open the position if it successfully breaks the 200d MA later.
DISCLAIMER: This information does not constitute an offer or solicitation to buy or sell. You should do your own analysis on top of my postings.
