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Dow Jones Remains Bid While Above 33,750

Dow Jones
Dow Jones

The stock market in the United States remains elevated. Despite some weakness seen lately, the dips lower appear to be just small corrections when compared to the rally seen during the COVID-19 pandemic.

Nothing appears to have a strong impact on the Dow Jones, as it keeps finding buyers in the 33,750 area. First, there were inflation fears. Higher inflation than expected in April did trigger a move lower, but buyers stepped in at the above-mentioned area.

Second, the Fed minutes from last week pointed to upcoming tapering. However, the stock market’s move lower was quickly bought, as the Fed’s message is not really a surprise to anyone.

Dow Jones Technical Analysis

The technical perspective on the Dow Jones looks interesting here. On the one hand, we can argue that the market forms a head and shoulders pattern, with the 33,750 level acting as a neckline. If that is the case, the 34,500 must hold on the move to the upside, and a break of the neckline would confirm the pattern.

On the other hand, the market may form a triangle as a continuation pattern. The two attempts to break below 33,750 failed, and now it threatens to make a new high.

Bulls may want to remain on the long side with a stop at the previous higher low and a 1:2 rr ratio. Bears may want to wait for the market to close below 33,750 before going short with a stop at the highs and a take profit set by using a 1:2 rr ratio.

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Dow Jones Price Forecast

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