Dow Jones Industrial Common Ranges to Watch as Index Rides 9-Day Dropping Streak

The Dow Jones Industrial Common (DJI) enters buying and selling Wednesday on a nine-day dropping streak, the longest stretch of consecutive each day declines for the blue chip index since 1978.

The droop, which equates to almost 1,600 factors, comes after the index closed above the intently watched 45,000 degree for the primary time on Dec. 4 following an prolonged post-election rally fueled by expectations of a market-friendly White Home and Congress.

Regardless of the current dropping streak, the index remains to be up 15% in 2024. Nevertheless, that return considerably underperforms the S&P 500’s 27% acquire and the Nasdaq Composite’s 34% bounce over the identical interval because of the Dow’s smaller publicity to mega cap tech firms.

Under, let’s break down the technicals on the Dow’s chart and level out necessary chart ranges that buyers could also be watching out for.

Ascending Channel in Focus

The Dow has tracked increased inside an orderly ascending channel since late July, with the index tagging the sample’s higher and decrease trendlines a number of occasions to determine simply identifiable assist and resistance areas.

Extra just lately, the index has trended decrease after working into resistance close to the channel’s high trendline earlier this month, elevating the potential of a possible breakdown.

Whereas the relative power index (RSI) confirms weakening momentum, it’s value noting that the final time the indicator flashed an analogous studying in late October, the Dow went on to rally 6% over the subsequent seven buying and selling periods.

Let’s have a look at three main ranges on the chart the place the index might encounter assist and in addition level out a key overhead space to look at throughout upswings.

Main Assist Ranges to Watch

Essentially the most instant degree to look at sits round 43,300. This space, just under the index’s newest shut of 43,450, finds a confluence of assist from the ascending channel’s decrease trendline, the upward sloping 50-day shifting common, the October swing excessive and the November swing low.

A decisive breakdown beneath the ascending channel might see the index fall to the 41,600 degree. Buyers who commerce the index might search for shopping for alternatives close to the outstanding late August peak and early November trough.

An prolonged draw back transfer might see the index revisit the psychological 40,000 degree, a area the place it will doubtless encounter assist close to a long-term trendline that hyperlinks numerous swing highs and swing lows on the chart between March and September.

Key Overhead Space to Monitor Throughout Upswings

Throughout upswings, buyers ought to intently monitor the important thing 45,000 degree. The index might run into overhead resistance on this space close to the higher vary of a collection of candlesticks positioned across the Dow’s all-time excessive (ATH).

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As of the date this text was written, the writer doesn’t personal any of the above securities.