The Dow Jones this week held into last week's gains as the lack of economic releases and the Thanksgiving Day holiday contributed to a steady risk sentiment. On the data front, the US Jobless Claims on Wednesday beat expectations across the board, which is a good thing for the market at the moment given some recession fears, although one beat after a series of misses doesn’t change the trend. Today, all eyes will be on the US PMIs, but given the early closure for Black Friday we might not see much movement, unless the data surprises.
Dow Jones Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Dow Jones is approaching the cycle high around the 35600 level. This rally continues to be supported more by the FOMO rather than some strong fundamental driver. We could see some profit taking around these levels which would finally give a decent pullback.
Dow Jones Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is diverging with the MACD right as it approaches the cycle high. This is generally a sign of weakening momentum often followed pullbacks or reversals. In this case, it might be another hint that we could see at least a pullback very soon.
Dow Jones Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see even better the divergence with the MACD which has been going on since the break above the key resistance around the 34000 level. The buyers are likely to lean on the trendline and the red 21 moving average to target the cycle high. The sellers, on the other hand, will want to see the price breaking lower to pile in and target first the low around the 34800 level and upon a further break, the support at 34000.
