The 31,000 remains key in the short-term for the Dow Jones. The level offered strong resistance, and now it acts as support as the price bounced several times so far on any retest.
Stocks in the United States trade with a mixed tone in the sense that Nasdaq corrected severely yesterday while the weakness was not seen in the Dow. Because today marks the first of the two testimonies to be held by Jerome Powell, the Fed’s Chair, and his words will move financial markets.
The focus so far this week was on the price of oil, which managed to climb back above $60 and make a new high, and Bitcoin, which collapsed over 20% from the highs. Because some public companies in the United States have invested heavily in Bitcoin, the fear is that we will see a spillover to the equity market should the rout in the cryptocurrencies continue.
Dow Jones Technical Analysis
Bears may want to wait for the Dow Jones to break below 31,000 and close there before going short. As such, the stop loss level for any short trade should be at the highs, and the take profit should be anywhere below the 29,600 as the Dow has more room to correct due to the fact that it lags the price action seen in other indices.
Dow Jones Price Forecast