Following an attempt to make its way higher after the US opening bell, the buying was short-lived, and the index bowed to the bears at the end of the trading day. But this is no surprise, considering the fact that Dow has been on a slide down from the 12th of June already. Yesterday’s down-day just confirms that the index is weak. But one bright spot is that the Dow Jones is still above the mid-term upwards moving trendline, drawn from the low of the 6th of February, which could slow down the selling.
For now, we remain sceptical of a possible short-term trend reversal back to the upside, as the bears continue dictating the way. The DJIA found support yesterday at around 24080 mark, which acted as strong support on Monday as well. If the bears will be strong enough to break that barrier, then this could lead the index towards the next good area of support at 23850, which sits on the aforementioned upwards moving trendline. The trendline could act as an important zone, which could stall the DJIA for a while, until the bulls and the bears battle it out over the future direction of the index.
On the upside, a move back higher and a close above the 200 EMA could give hope for the bulls that not all is lost. A break above the 24400 level could open the path towards the 24600 area again. If the bulls decide to continue pushing higher, the last-mentioned area could be seen as a good barrier to overcome, if the bulls really want to take that driver’s seat and aim for higher levels again. The other strong area of support could be the 24855 zone.
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