DJIA: growth is possible

November 23, 2015

Current trend

Prior to Christmas and the New Year amid growing expectations of investors of an interest rates hike in the US in December, American stock indices keep strengthening.

Last Friday the S&P 500 grew by 0.4%, Nasdaq Composite by 0.6% and Dow Jones Industrial Average by 0.5% that was the strongest weekly growth after the world markets slump in August.

Today attention needs to be paid to the Chicago Fed National Activity Index for October that estimates economic activity and inflationary pressures and to the Markit Manufacturing PMI for November. Strong data will strengthen DJIA.

Support and resistance

The price is moving along an ascending channel on the daily chart with the upper border above the level of 18100 and the lower border at 17400. 

At present, the price is in a downward correction and trading near the level of 17830. The correction can last up to the levels of 17730, 17650 (EMA50 on the 4-hour chart), while a breakdown of the level of 17400 (EMA200 on the 4-hour and daily charts) might resume a downward trend.

On the 4-hour chart, OsMA and Stochastic signal sales, while on the daily and weekly charts the indicators recommend purchases.

Support levels: 17730, 17650, 17400.

Resistance levels: 18000, 18100.

Trading tips

Pending buy orders can be placed from the level of 17840 with targets at 17900, 18000, 18100 and stop-loss at 17780.

Pending sell orders can be placed from the level of 17760 with targets at 17730, 17690, 17650, 17600, 17400 and stop-loss at 17810. 

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