Dow Jones Industrial Averages long-term technical analysis

Dow Jones Industrial Averages is one of the three main indices watched by traders around the world. When the index is moving down the ripple will influence how Asian session reacts and continue to European indices. The major indices already enjoyed rally since it bottoming out in March 2009, if we calculate it almost eight years since the event.

The rally experiences little to no obstacle until 2015 where the index corrected 23.6% from the top. The correction did not take a long time; the bull takes the correction as an opportunity to add more long positions. 2016 mark another record high printed by the index.

Although the index is moving up and upbeat, situation around the world sluggish with falling demand in China, Brexit issue, oil price slump, tension in South China Sea, North Korea nuclear test and so on. There is a possibility the index will move down affected by the situation in the global market.

Monthly chart

Dow Jones monthly chart show bullish trend intact after it printed new record high in 2016. However, the bull needs to be wary as it is not far from 2015 high which could invite double top pattern if sold. Overall 14,000 will act as a support level in the next correction, a break below the level might trigger a bearish trend.

Weekly chart

DJIA weekly chart throws out an indication of bearishness after the index closed below yellow trendline. Though it is bearish to turn the medium-term trend into bearish, it needs to close below previous rally low at 17,063. There is a chance for the bull to escape bearish trend by printing another record high above 18,668.

Daily chart

Daily chart confirmed bearish breakout below $18,000 the first time since July’16. The price expected to move down further to nearest support daily SMA 200. If no bounce happens, the index will fall further and turn the medium-term trend into bearish.