Dow Jones Market Outlook

Dow Jones Industrial Average Stock Index (US30) finished up higher by 1 percent recovering most of their opening gains late in the session Tuesday as investors weighed signs of recovery in China’s currency and stock markets against a fresh fall in oil prices hitting a fresh 12-year low.

“That reversal (late Tuesday) probably marks a short-term bottom in the market,” said Lance Roberts, chief portfolio strategist at Clarity Financial.

A stronger dollar and failure to stop a global oil glut have influenced on sharp falling of prices in recent months, while mounting concerns about China’s sluggish growth have multiplied fears about demand from the world’s second-largest economy. U.S. stocks are down more than 5 percent year to date, while U.S. crude oil has lost more than 15 percent in the seven trading days of the year so far.

Darren Sissons, managing director at Portfolio Management Corp said “I don’t see a huge catalyst for U.S. equities right now,”

But he thinks domestic-focused U.S. companies could see some modest gains against multinationals which could face trouble as Chinese demand diminishes.

The moves come amid an uncertain path for the Federal Reserve, which is watching the U.S. economy closely as it considers the path for increasing interest rates.

1DJ

The Daily Technical Chart is suggesting we can see short term recovery in Dow Jones. A sustained move over 16770 will indicate presence of strong buyers. Again a sustained move below 16170 could initiate the continuation of aggressive breakdown.

2DJ

Four Hour Technical Chart suggesting price is still in bearish territory and there are tons of resistance and down trendline above to resist price to go above. Also shape of upside move is corrective and impulsive move is missing here which indicates lack of momentum in the upward move right now. However if price can overtake the 16770 level it can generate substantial momentum. On the other side it price fall below 16175 it will indicate the continuation of downtrend.

3DJ

Short term Timerframe M30 is showing price is in the confluence zone of support, upchannel and down trend line. So according to short timeframe if price can go break the downtrend line it may go further high. On the other hand if it rejected by the confluence zone and fall below the support level 16466 it could initiate a sharp down fall again.

Trade Suggestion

 Buy is suggested if price could go above 16770 with strong momentum and retest the level 16770 after breakout to confirm it as support with Stop Loss level below 16700 and Take Profit level above 16900.

Sell is suggested if price could break the support level 16170 with Take Profit level below 15900 and Stop Loss above 16230.

Leave a Reply

Your email address will not be published. Required fields are marked *