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Dow Jones Technical Analysis: Consolidating Gains – 05 April 2022

The Dow Jones Industrial Average rose during its recent trading at the intraday levels, to achieve new gains in its last sessions, by 0.30%, to gain about 103.61 points. It settled at the end of trading at the level of 34,921.89, after rising by 0.40% in Friday’s trading.

19 of the 30 index components rose, led by Salesforce Inc. which recorded a gain of 3.11%, followed by Apple Inc. by 2.37%, followed by Intel Corp. by 2.27%.

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There isn’t much on the economic calendar in terms of market-moving data, and corporate news is quiet ahead of earnings season officially starting on April 13th, with results released from JPMorgan Chase (stock ticker: JPM). The only real news that grabbed attention on Monday morning came from Tesla owner Elon Musk, who bought a large amount of shares in social media giant Twitter (TWTR), sending that company’s shares up and bolstering the tech sector.

This will not move the market in general, so the focus will remain largely on the Federal Reserve and monetary policy. Investors will get a sense of what the Fed might go for when the minutes of the March FOMC meeting are released on Wednesday.

Technically, the index’s rise comes amid its being affected by leaving the range of a bearish corrective price channel that limited its previous trading in the short term. This is shown in the attached chart for a (daily) period, with the continuation of positive support for its trading above its simple moving average for the previous 50 days, under the control of the main bullish trend over the medium term. In the beginning of that, we notice the influx of positive signals on the relative strength indicators, after they reached earlier in overbought areas, which may curb the index’s upcoming gains.

That is why our positive expectations surrounding the index will continue during its upcoming trading, as long as the support level remains at 34,352.96, to target the first resistance levels at 35,631.19.

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