Dow Jones Finds Resistance at its Record-Highs

Yesterday, the Dow Jones rallied to 28,326.3 after it bottomed at 28,160.1. However, the US’ blue-chip stock index failed to trade past its current record highs above 28,330.0. It had settled at 28,267.2 by the New York session close with a 31.3-point or 0.11% gain.

Gainers and Losers

Goldman Sachs led gains yesterday at 1.36%. It was then followed by Johnson & Johnson with a 1.25% profit. Meanwhile, American Express and Home Depot were both up by 1.03% and 1.02%, respectively.

On the other hand, Walgreen incurred the biggest loss at -1.23%. The drop in the price of the stock can be attributed to news that its rival drug store chain, CVS, is being sued by the government. The lawsuit which revolves around fraudulent billing and issuing drugs without valid prescriptions. While it does not have anything directly to do with Walgreen, it still made investors jittery.

Intel and McDonald’s were both down by 0.69%. Chevron was also among the biggest losers yesterday as it was down 0.64%.

Positive US Data

It may have also helped the Dow Jones that second-tier data from the US came better than expected. Data on building permits and housing starts both topped forecasts. In November, the number of building permits issued was at 1.48 million which was higher than the 1.41 million forecast. Meanwhile, there were 1.37 million residential homes that began construction during the month. This figure was higher than the anticipated 1.34 million reading.

Industrial production also came in better than expected at 1.1% versus the 0.8% consensus.

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Dow Jones Outlook

On the hourly chart of Dow Jones CFDs, we can see that the stock index still has room to trade lower. The rising trend line from connecting the higher lows of December 3, December 11, and December 12 seems to coincide with the area around yesterday’s lows at 28,184.4. Additionally, the 100 SMA also aligns with this price level. A break below this support could mean that the blue-chip stock index may soon fall to the 200 SMA around 28,029.4 where the Dow Jones hit highs on December 6.

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