The DJIA completed the formation of a bearish pattern mentioned in our previous report on June 24. The index managed to breach its neckline at 9790.00 activating the pattern which pushed the index south over short term basis.
Dow Jones in Depth
The index previously failed to breach the 61.8% correction for the entire downside move which started from 14266 to the trough at 6461 from where the upside correctional move started.
After this level remained intact, the index reversed to the downside to breach the support for the medium term upside wave and continue the bearish formation.
The 100 Days MA was strong resistance against the index adding more bearishness.
Momentum indicators Stochastic and RSI are in oversold areas, and accordingly we expect volatility and fluctuations with upside bias to retest the breached neckline before resuming the downside move initially targeting 8910.00 then 8300.00.
The downside move remains valid with daily closing below 9790.00 as breaching this level and stabilizing above it will take the DJIA towards 10350.00 areas.
By: Yasir Mubarak
Senior Technical Analyst
yasir.mubarak@ecpulse.com
www.ecpulse.com