Dow Jones: A Correction May be Imminent

Dow Jones has bounced off the one-month low it hit on Thursday, even as it remains below the crucial level of $35,000. The stock market has eased as investors continue to digest Wednesday’s FOMC meeting minutes.

The Fed hinted at tapering its asset purchases before the year’s end. However, the policymakers asserted that the move shouldn’t be seen as a precursor for imminent rate hikes. Notably, the ongoing inflationary pressures, coupled with fears over the Delta variant, will likely curb gains in the stock market.

After entering in the oversold territory on Thursday, Dow Jones is on a corrective rebound. From this perspective, it may be subject to additional looses in the ensuing sessions.

Dow Jones technical outlook

Dow Jones is wavering below the psychological level of 35,000 after extending the week’s losses in the previous session. The index has been on a decline since hitting a record high of 35,637.47 on Monday. Since then, it has declined by about 2.09%.

At the time of writing, Dow Jones was down by 0.19% at 34,894.11. On a two-hour chart, it is trading below the 5 and 10-week exponential moving averages with an RSI of 36. In the previous session, it entered the oversold territory with an RSI of 29 after dropping to a one-month low of 34,684.64.

In the near term, Dow Jones is likely to continue wavering around the crucial level of 35,000 as it finds support along Thursday’s low of 34,684.64. Entry of more buyers will likely place the resistance level along the EMAs at 35,197.70 before pulling back. On the flip side, a move below the current support level will likely place it at 34,558.99.

Dow Jones
Dow Jones