Dow Jones Technical Analysis: The Index is Trading in Volatile

Technically, the index moves in fluctuating transactions above the important support level of 31,727.00. 

  • The Dow Jones Industrial Average rose during its recent trading on intraday levels, to achieve gains in its last session by 0.41%, adding about 132.28 new points to the index.
  • It settled at the end of trading at the level of 32,237.54, after the index rose during Thursday’s trading by 0.23. %.
  • During the past week, the index was able to achieve gains of 1.18%, after recording two consecutive weeks of losses before.

US stocks pared losses and climbed into positive territory on Friday afternoon as concerns persisted about the stability of banks. US-listed Deutsche Bank shares rebounded from their lows earlier in the session and posted a closing loss of 3.5%. This came in part with Strengthening consensus around the expectation that the Fed will hold off on raising interest rates at its next policy meeting scheduled for May.

As trading closed, the markets were placing a 92% chance that interest rates would stabilize at the next central bank meeting. Those odds were 73% the day before and about 54% last Friday.

European Central Bank President Christine Lagarde tried to allay fears by telling EU leaders that the eurozone banking sector is resilient and that the central bank's toolkit is equipped to provide liquidity to the financial system if needed.

While Treasury Secretary Janet Yellen announced Friday that she had called an unscheduled meeting of the Financial Stability Oversight Board, or FSOC, which was set up in the aftermath of the 2008 financial crisis to help the government combat threats to financial stability. The FSOC also issued a short statement after the market closed on Friday. saying that "while some institutions have come under pressure, the US banking system remains sound and resilient".

St. Louis Federal Reserve President James Bullard said on Friday that the recent decline in Treasury yields could help relieve some of the pressures facing the banking sector.

A report on Friday on durable goods sales showed orders fell 1% in February, largely due to slumping demand for passenger planes and new cars, meanwhile, the S&P Global Flash services sector index in the US rose to an 11-year high.

Technical Outlook:

Technically, the index moves in fluctuating transactions above the important support level of 31,727.00. In front of the dominance of the bearish corrective trend in the medium and short term, and its trading along a bearish sub-sloping line, as shown in the attached chart for a period (daily). Negative pressure continued for its trading below the simple moving average for the previous 50 days. In addition to the above, we notice the start of a negative crossover in the relative strength indicators, after reaching exaggerated overbought areas compared to the index's movement.

Therefore, our expectations suggest that the index will return to decline during its upcoming trading, as long as the resistance of 32,582 remains stable, to target once again the support level of 31,727.00 in preparation to break it.

Dow Jones Industrial Average

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Akram Adel
Akram has experience working in the Forex industry since 2008. He works as a trainer and lecturer for technical analysis, trading strategies, and foundations of risk and capital management. In addition, he has experience with topics in the financial markets on many well-known sites that specialize in this field. Akram currently writes for a number of sites by providing accurate and professional articles and daily reports.