Dow Jones starts this week with a proper buy signal
Monday brought us a nice rise on stocks and it looks like Tuesday is set for continuation of this optimism. In today’s analysis, I will show You Dow Jones, where a really nice bullish situation just emerged on the chart.
Let’s start from the big picture. Dow is currently balancing on the 38,2% Fibo, which very often plays a role of a strong support. Index is inside of the wedge pattern (green), which is a correction formation, promoting in a long-term breakout to the upside.
Most recently, Dow created a double bottom formation (blue), precisely on the 38,2% Fibonacci. In the last several hours, index managed to break the neckline of this double bottom formation and the mid-term down trendline (black). Those factors creates a positive sentiment here and a legitimate buy signal.
As for the target, the upper line of the wedge seems like a good place to start. This is a mid-term target so will not happen overnight. My view on Dow is positive as long as the price stays above the orange area, which by the way is a pre-Covid high. Price closing a trading week below that support would be a signal to sell but this scenario is currently less likely to happen.
Author
Tomasz Wisniewski
Axiory Global Ltd.
Tomasz was born in Warsaw, Poland on 25th October, 1985.
