Dow Jones Technical Analysis: Index Takes Profits

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The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to break a series of gains that continued for four consecutive sessions, recording losses in its last sessions by -0.19%. It lost the index about -65.38 points to settle at the end of trading at the level of 35,228.82, after it rose 0.97% in trading on Tuesday.

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The performance of the 30 components of the index was equal, as 15 of them rose and the rest closed in the red zone. The share that declined the most by percentage was Home Depot Inc. Shares of -2.91% and Salesforce.com Inc. By -2.87%, while on the other hand, UnitedHealth Group Inc.’s shares topped the list of the highest percentage gainers. by 1.98% and Walmart Inc. By 1.79%.

Shares fell on Wednesday after Russia downplayed peace talks with Ukraine and intensified its attacks on Ukrainian cities. This helped return the price of West Texas Intermediate crude oil more than 2% to return concerns about an increase in already high inflation. This may lead to more aggressive intervention by the Federal Reserve in an attempt to curb this inflation by raising interest rates at its next meeting by half a percentage point instead of the expected quarter point.

On the economic data front, US fourth-quarter GDP growth was revised to 6.9% annualized from 7%. The ADP showed that the private sector added 455,000 jobs in March. Economists polled by Dow Jones Newswires and The Wall Street Journal had forecast an increase in private sector jobs of 450,000.

Technically, the recent index’s decline came as an attempt to reap the profits of its recent rises. It also tried to drain some of its clear overbought by the relative strength indicators, especially with the emergence of a negative crossover in them. It will help it gain positive momentum that might help it to rise again.

This is ahead of the continuation of the positive support due to its continuous trading above its simple moving average for the previous 50 days. This is affected by leaving the range of a bearish corrective price channel that was limiting its previous trading in the short term, as shown in the attached chart for a (daily) period.

Therefore, we expect the index to rise again in its upcoming trading, to target the important and close resistance level 35,631.20, in preparation for attacking it.

Dow Jones

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