DJIA set to recover after Wednesday’s fed inspired dump

The Fed December’s minutes of the meeting leaked that the central bank will remove economic aids sooner than expected this year. Traders and investors reacted bearishly by bringing the DJIA index down 392 points yesterday. At the current time, DJIA futures are pointing upward 81 points which signal recovery.

It seems the sentiment will continue to bearish for a while as the market position for rate-hike. Despite the situation, there is a chance of bullish continuation when the normalization is finished.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index reversed the bullish pressure and printed a bearish close yesterday. The bearish movement resulted from the Fed announcement that interest-rate will be increased sooner this year. A bearish engulfing pattern formed which suggests bearish correction toward the daily SMA 50. If the bearish pressure continues then traders will expect a deeper pullback toward the daily SMA 200.

Eli Lilly and Company (LLY)

LLY share prices managed to breakout above the triangle pattern. However, the bullish movement experienced bearish pressure, and currently LLY trading near the daily SMA 50 also below the trendline. If the share prices continue moving lower then a test on the bottom trendline will happen. Traders will monitor the price movement inside the triangle range. As long as LLY stays above the daily SMA 200 then there is a chance of bullish continuation.