Dow Jones Technical Analysis: Index Continues To Rise

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Our expectations indicate more ascent for the index during its upcoming trading.

The Dow Jones Industrial Average continued to rise during its recent trading at the intraday levels, to achieve gains for the fourth consecutive session, by 0.97%, to gain about 338.30 points. It settled at the end of trading at the level of 35,294.20, after rising by 0.27% in Monday’s trading.

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All 30 components of the index rose except for only five stocks that closed in the red zone. Cl A rose by 3.33%, followed by Nike Inc. Cl B by 3.21%, then Boeing Co. by 3.00%.

US stocks rose after the Russian-Ukrainian talks that brought hope that a de-escalation of tensions in Eastern Europe is imminent, as Russian, and Ukrainian officials held ceasefire talks to review the terms of a possible deal. Ukrainian officials expressed optimism about a ceasefire, although the talks ended without any results announced.

News also surfaced that Russia would significantly reduce its military activity near Kyiv. This helped drop oil prices by about 1%, after easing concerns about further restrictions on Russian oil from Western countries. This would significantly reduce global supplies, also helping to mitigate already high inflation.

Meanwhile, Philadelphia Federal Reserve President Patrick Harker predicted a “series” of increases in the US short-term key interest rate this year, and said he was “very open” to a half-percentage point hike as the central bank moves to stem the worst spread of inflation in 40 years.

In economic data, the Conference Board’s index of consumer confidence rose to 107.2 in March and increased for the first time in 2022, even as Americans remain concerned about rising inflation and the economic fallout from the war in Ukraine. Economists polled by the Wall Street Journal had expected the index to rise to 107.5.

Technically, the index is affected by its exit from the range of a descending corrective price channel that limited its previous trading in the short term, as shown in the attached chart for a (daily) period. This is supported by its continuous trading above its simple moving average for the previous 50 days, in addition to the influx of positive signals on the relative strength indicators, in spite of its access to areas of severe saturation of purchases.

Therefore, our expectations indicate more ascent for the index during its upcoming trading, to target the first important resistance levels at 35,631.20, in preparation for attacking it.

 

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