I mentioned last week that a correction or retracement is inevitable on US stock market and Dow Jones Industrial Average. There was just a slight retracement observed in the last 5 days and following very closely to the 50d MA.
If we follow Alexandra Elder’s recommendation, we must always look at the stock market chart on both daily and weekly charts.
Let’s look at the US Dow Jones Industrial Average on the daily and weekly chart now!
Dow Jones Industrial Average Daily Stock Market Charts
If we look at the Dow Jones stock market chart now, you can see that the Dow Jones is following the 50d MA resistance now and it is still not breaking the 50d MA resistance.
After hitting the 50d MA resistance for the first time on Monday, it has been trending lower and lower due to the resistance. We can also see that the Dow Jones is also sitting on the lower band of the upward channel line. This channel line is acting as the support now.
So, it is very easily to conclude that Dow Jones is not facing both support and resistance now. We will be able to know whether the market is breaking upward or downward this week!
Looking at the current market sentiment plus the worry of the automakers deal, the probability of breaking downward is there. Plus, looking at the RSI and stochastic indicators of Dow Jones average, we can see that they are hitting the overbought area and it is now trending downward as well.
Dow Jones Industrial Average
Dow Jones Industrial Average Weekly Stock Market Charts
A pennant shape is observed on the Dow Jones weekly chart, it shows that there is a possibility of breaking downwards as well, plus, the candle formed a doji after 4 weeks of up trend. This reinforce the possibility of breaking downward.
Following Alexandra Elder’s screening rules, we look at both the daily and weekly chart of Dow Jones Industrial average, and I believe a bearish sentiment is developing in the market and there will be selling pressure in the coming week!
Dow Jones Industrial Average Weekly Chart
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.
Welcome back to InvestMoneyLab, you can now join our Facebook Friend of InvestMoneyLab to get a FREE Book by T. Harv Eker Now! You can also receive latest profitable trading system and stock picks for free in future. Thanks for visiting!
