Dow Jones Industrial Average (.DJI) Rallies to Six Month Highs

Dow Jones Industrial Average (.DJI) Rallies to Six Month Highs

Dow Jones Industrial Average (.DJI) Rallies to Six Month Highs

It had been a rather sideways start to Q2 for the Dow Jones Industrial Average. Setbacks at Boeing have continued to constrain the blue-chip index, and while the S&P 500 continued to rally through the Q2 open, prices in the Dow snapped back last week to re-test a key zone of support.

That support grind in the Dow lasted for three days last week, until a Friday breakout pushed prices back up towards prior highs, aided in part by a recovery in Boeing, which is the Dow’s largest component at more than 10% of the index. That enthusiasm has lasted through this week’s open, and at this point, the Dow Jones Industrial Average is trading at fresh six-month-highs.

As mentioned above, key for this bullish move has been a similar scenario in Boeing (BA). Boeing is a key aspect of the Dow Jones Industrial Average, and when the company was surrounded by tragedy in early-March, Boeing stock took a large dive down to a key area of confluent support. This runs from 364.85-369.24; and this area has held support in the stock after multiple attempts from bears to break-lower. Most recently, this zone came back into play last week, going along with the Dow’s visit to key support; and buyers have so far responded to push prices-higher.

But – be careful of chasing this move; in either Boeing or the Dow, as a portion of unfilled-gap remains in the BA chart that could be closed by yet another visit to this key zone of support.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 26,962.29.

The projected lower bound is: 25,991.56.

The projected closing price is: 26,476.93.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 87.3107. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 63.90. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 35 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 112.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 11 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 67.891 at 26,452.660. Volume was 8% below average (neutral) and Bollinger Bands were 32% narrower than normal.

Open High Low Close Volume___
26,482.18926,530.71126,397.18926,452.660 302,342,656

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 26,306.93 25,837.67 25,289.89
Volatility: 9 12 20
Volume: 254,603,200 289,778,816 313,430,592

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

DJ INDU AVERG is currently 4.6% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of .DJI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .DJI and have had this outlook for the last 9 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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