Nasdaq

Dow Jones Could Drop Below 31280 On Poor US Data

The Dow Jones Industrial Average is having an underwhelming day so far, as it currently trades flat at 31393, following the disappointing ADP Employment Change data. According to Automatic Data Processing Inc, the number of private-sector jobs added to the US economy in February 2021 stood at 117K. This number was less than the projected figure of 203K, and was also less than the previous number (195K). 

To further add a bearish tone to the market environment, the ISM Non-Manufacturing PMI number was a disappointment, registering at 55.3 versus the expected and previous figure of 58.7. 

With the major economic data for the day ending up negative, the bulls are finding it hard to get any momentum, with early gains on the Dow at market open being erased very quickly by the poor data releases.

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Technical Levels to Watch

The active daily candle shows price trading flat in a choppy trading session. However, the price remains above the 31282 support line. Bulls would be looking for a bounce on this support, along with a push to the upside, to target 31739 initially. The all-time high at 32084 remains the barrier to beat for the price to continue its march into record territory. The 100% Fibonacci extension at 32505 remains the potential upside target for the future.

On the other hand, a decline below 31282 is needed to target 30953, with 30585 and 30358 serving as additional targets to the south. The presence of the ascending trendline which connects the lows of 2 November 2020, 1 February 2021 and 1 March 2021 is noted. There has to be a breakdown of this trendline for the support levels mentioned to come alive as the potential downside targets.

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Dow Jones Daily Chart

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