DJI - Any potential bullish move will be likely
Last week, I outlined a bearish picture for the Dow Jones Industrial Average $Dow Jones(.DJI)$ . The analysis was based on the index showing a decline from the $44,800 resistance area while the Stochastic oscillator was in overbought territory.
To validate this bearish view, $44,445 was the key reference level; staying below it would confirm downside momentum. My first support target was set at $44,086, which held until Tuesday.
On Wednesday, however, the price flushed lower, breaking that initial support and reaching our next target at $43,802. The actual low of the week was $43,758—a minimal percentage difference. Although the price bounced from that low, it failed to reclaim the critical $44,445 level, indicating that momentum has not yet shifted back to the bulls.
As of today, the caution mode continues in the chart, the bearish Stochastic crossover is imminent but on the other hand the price set an indecisive candle that might suggest a bullish continuation considering the lower wick. Factors like the consolidation at the point of control (peak of the volume shelf) and the position above the 5 weekly average suggest a chance for a bounce. The odds for a healthy pullback are higher than a continuation of the rally.
For next week, any potential bullish move will be likely as long as $44,224.3 continues as support level. Staying above this area suggests a bullish push towards $44,689.6. Conversely, if this key level is broken, something that could happen if the Stochastic is signaling correctly and the indecisive candle is not validated, the focus shifts to a bearish target of $43,876.9.
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