High-probability reversal zone spotted on DJIA, traders...
Following heavy losses during last week's collapse, the Dow Jones Industrial Average printed an impressive recovery on Tuesday, up 2.25% on the day. Led by technology and healthcare sectors, the H4 candles reclaimed its August’s opening level at 25376 and concluded trade within a stone’s throw away from resistance marked at 25815.
What’s also notable from a technical perspective is weekly price recently crossed swords with the underside of a demand-turned resistance area at 25764-26157. In addition to this, we can also see daily price flirting with the top edge of a demand-turned resistance area at 25603-25763.
Areas of consideration:
The H4 resistance mentioned above at 25815 – coupled with a 161.8% H4 Fib ext. point at 25922, a 50.0% H4 resistance value at 25909 and current higher-timeframe resistance areas – forms a high-probability sell zone (Green). In the event this area holds and price action heads for lower ground, the first port of call will likely be August’s opening level highlighted above at 25376. In regard to stop-loss placement, a couple of points above 25922 should suffice. Conservative traders, on the other hand, may want to consider waiting for additional candlestick confirmation before pulling the trigger, as there’s always a chance a fakeout north may be seen before rotating lower.
Today’s data points: US housing figures; FOMC member Brainard speaks; FOMC meeting minutes; Treasury currency report.
What’s also notable from a technical perspective is weekly price recently crossed swords with the underside of a demand-turned resistance area at 25764-26157. In addition to this, we can also see daily price flirting with the top edge of a demand-turned resistance area at 25603-25763.
Areas of consideration:
The H4 resistance mentioned above at 25815 – coupled with a 161.8% H4 Fib ext. point at 25922, a 50.0% H4 resistance value at 25909 and current higher-timeframe resistance areas – forms a high-probability sell zone (Green). In the event this area holds and price action heads for lower ground, the first port of call will likely be August’s opening level highlighted above at 25376. In regard to stop-loss placement, a couple of points above 25922 should suffice. Conservative traders, on the other hand, may want to consider waiting for additional candlestick confirmation before pulling the trigger, as there’s always a chance a fakeout north may be seen before rotating lower.
Today’s data points: US housing figures; FOMC member Brainard speaks; FOMC meeting minutes; Treasury currency report.
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