Dow Jones corrected recently as it found strong resistance at the highs. It still remains the only major index (after the S&P500 and Nasdaq 100) that did not make a new all-time high during the pandemic.
However, it keeps finding bids on every move lower and, as such, remains well supported on every correction. With the U.S. elections only two weeks away from now, the chances are that the Dow Jones will remain close to the all-time highs, with the market pressuring for higher levels.
Unemployment On The Rise Again
Yesterday’s unemployment data showed the initial jobless claims continuing to rise. At this date, over twenty million people in the United States depend on unemployment benefits, and the number remains extremely elevated.
The focus moving forward is on the fiscal stimulus and what it means for the stock market. If anything, it will bring a new incentive to reach new highs, as the population will spend the newly received funds on goods and services provided by corporate America.
Dow Jones Technical Analysis
Dow keeps evolving in a rising channel. So far, each dip in the last couple of weeks was bought. Yesterday marked the second time that the Dow tested the upper trendline. Despite the weak unemployment data, Dow Jones bounced, nevertheless.
Bulls may want to trade on the long side to target a move either into the upper edge of the rising channel or towards new all-time highs. To get there, consider placing a stop-loss order at the half distance between the previous two higher lows that mark the bullish trend. Next, project the take profit two or three times higher, by using a risk-reward ratio of 1:2 or 1:3. Also, to keep it safe, by the time the price reaches 1:1, consider moving the stop to break-even or even booking half of the profits.
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Dow Jones Forecast