Thursday’s Technical Outlook for DJIA (.DJI)
Wall Street finished mixed, with the DJIA and the S&P 500 extending their rallies a bit, but the NAS Comp edging 17 pts lower, to close the day at 5,005.73.
The DJIA closed 0.13% higher at 18.372.12, while the S&P 500 added 0.01% to 2,152.43. Trading was choppy worldwide, as investors took a step aside ahead of the upcoming BOE’s monetary policy decision, as most of equities latest rally was based on hopes that more easing is coming, not only from the UK, but also from Japan.
US stocks rallied to fresh all time highs not only on hopes, but also on encouraging US data all through Q-2, which may supports some further rallies in equities.
DJIA technically, the daily shows that the index has managed to post a higher high and a higher low while developing well below its MAs.
In the same chart, indicators head North near overbought levels, in line with the macro view.
In the 4 hours, the Momentum indicator keeps diverging lower, but the RSI holds within overbought territory and the 20-Day SMA heads North below the current mark, indicating a limited Southside potential.
The US and Japanese markets are driving almost all the markets higher but the chances of profit booking at these elevated levels look much higher now.
DJIA at 18347.67, +0.66% has marked a new life high at 18372 and closed just below the previous high at 18351. The last time this kind of rally was seen (Feb/March 2016), the index had gained 13.5% in the 1st 6 weeks from the bottom of 15500. Similar gain indicates a rise above 19000 in the next 3 weeks, but it needs to hold above 18000 near term. PE
Support marks:18,313 18,262 18,214
Resistance marks: 18,425 18,480 18,550