Summary:
- Dow Jones (US30) paints a triple top pattern
- Will the 200-session moving average fend off the bears?
- Index trades within a steep downward channel
Re-escalation of the US-China trade conflict put rally on the global stock markets to an end. While S&P 500 (US500) and Nasdaq (US100) managed to set fresh ATH this year, Dow Jones (US30) failed to do so. The US large-cap benchmark once again climbed to the 27k mark but failed to break higher. Note that it was the third time since the beginning of 2018 that this level had halted an upward move. In such a landscape, a pullback towards the upper limit of earlier broken upward channel is getting more probable. However, in theory the triple top pattern should not be viewed as an “sell” signal unless the price breaks below December’s low.
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Source: xStation5
US30 is trading close to the 200-session moving average and 23.6% Fibo level (25500 pts). This area could provide support for the bulls in the days to come. However, in case it is breached, a downward move may extent to as low as 24700 pts handle - 38.6% Fibo level and local highs from January 2019.
Source: xStation5
Moving onto the intraday frame (H4) we can see that bears were dominating for the past couple of days. The index has been moving within a downward channel over the short-term since the beginning of May. Just as in the case of D1 interval, the demand zone around 25500 pts, where 78.6% Fibo level of the latest short-term upward move and local high from 27 March is localized, should serve as the nearest support.
Source: xStation5
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