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Dow Jones Technical Analysis: Deepening its Losses – 07 March 2022

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

The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to record losses in its last sessions, by -0.53%. It lost the index towards -179.86 points, to settle at the end of trading at the level of 33,614.81, after it declined in Thursday’s trading by -0.29 %.

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With trading volume approaching 413 million shares, about 16 components of the 30 index declined, led by Boeing (BA) share, with a loss of -4.24%. As for the most prominent gainers by percentage, Wal-Mart (WMT) share increased by 2.53%.

The headlines on the escalation of the crisis in Eastern Europe and the development of the military conflict between Russia and Ukraine overshadowed the positive US employment data for February released on Friday morning.

Nonfarm payrolls increased for February by 678K, while the median forecast was only 440K. The average hourly wage in the United States also rose one cent to $31.58, and hours worked increased by 0.1 hours.

Despite this, investors focused on news of the fire that was extinguished at a nuclear power plant in the Ukrainian city of Enerhodar, which was bombed by Russian forces. The plant is said to have six reactors, three of which were disconnected before the attack, the Associated Press reports. The agency reported Friday afternoon that the Russian military had taken control of the nuclear power plant, the largest in Europe.

Russia’s control of the nuclear plant raises concerns that its military will continue to control other Ukrainian infrastructure such as energy, water, and communications, as well as heightening fears that these conflicts will lead to a nuclear catastrophe that shakes the entire world.

Ukraine’s state emergency services later stated on Facebook that the fire was in a training building and had been contained. The regional military service said early measurements on Friday showed the radiation was “unchanged” and posed no danger to residents.

Technically, the index retreated after it retested the main resistance level 34,000 as we expected it in our previous reports. This is within the dominance of a bearish corrective wave in the short term and was affected by the breaking of a minor bullish trend line earlier, as shown in the attached chart for a (daily) period. The negative pressure of its trading is below the simple moving average for the previous 50 days.

Therefore, our expectations indicate more decline for the index during its upcoming trading, especially in case it breaks the current support level 33,271.90, to target the support level 32,071.40.

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