A drop in the number of first-time claims for unemployment benefits has helped the Dow Jones Industrial Average to a bullish open this Thursday. Initial jobless claims for the week ended 28 November fell from last week’s upward revision of 787K to 712K, which was also less than the market expectation of 775K.
Continuing jobless claims for the week ended 21 November came in at 5,520K, which decreased from the previous week’s level of 6,089K (revised upwards). Final Services PMI from Markit also came in at 58.4, which beat the consensus (57.5) and previous (57.7) numbers.
These numbers provided some hope that the US Labour market had shown some resilience, despite new restrictions stemming from the 2nd wave of the COVID-19 pandemic.
Talk of further stimulus from the US Congress is also boosting sentiment on the Dow. However, markets remain cautiously optimistic ahead of tomorrow’s Non-Farm Payrolls report.
Technical Outlook for Dow Jones
The Dow Jones Industrial Average’s daily chart shows that today’s candle is yet another pinbar formed on the triangle’s ascending border. This picture pushes the index closer to the 30101 resistance created by the triangle’s upper edge that connects the 9/16/24/25 November highs. A break above this border initiates the breakout move on the ascending triangle, with 31079 serving as the initial target in a measured move expected to take the Dow to the 127.2% Fibonacci extension level of 34025. This projected price point corresponds to the price swing from 2 November to 24 November and has 31079 and 32376 as intervening targets in the medium term.
On the flip side, a breakdown of the lower border of the triangle invalidates this bullish expectation and opens the door towards downside targets at 29255 and 28979, as well as 28746 and 28195 in the near-term.
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Dow Jones Daily Chart
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