Dow Jones remains bid while above 29,500 as buyers step in on every dip so far. The U.S. Congress passing the new coronavirus bill was enough to trigger a “panic buying” on Monday as the index fell over five hundred points. As it turned out, it was just another opportunity to buy the dip, as the price action in the Dow Jones index seems to be influenced by algorithmic trading typical during this time of the year.
With no economic events ahead and with the stimulus already behind, traders will focus on technical levels. On that front, the 29,500 level seems pivotal, acting like a bull/bear line for the index.
Dow Jones Technical Analysis
Put it, while the price remains above 29,500, the bias is bullish. On the contrary, a move and daily close below the level turns the sentiment bearish.
The chart below shows the entire 2020 price action on the Dow Jones – the meltdown in March, followed by a new all-time high in the second half of the year. The move to the new all-time high came after the U.S. elections. Since November 3rd, the Dow moved higher and never looked back after regaining 30,000 points.
Bears may want to stay on guard for a break below 29,500, while bulls should focus on the price action while above 29,500. Expect tight ranges during the end of the year holidays.
Dow Jones Daily Chart
