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Dow Jones Technical Analysis: Index Continues to Rise – 21 March 2022

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

The Dow Jones Industrial Average rose during its recent trading at the intraday levels, to achieve gains for the fifth consecutive day, by 0.80%, to add to it about 274.17 points. It settled at the end of trading at the level of 34,480.77, after its rise in trading on Thursday by 1.23% . During the past week, the index rose sharply by 5.50%. The index recorded its best weekly performance since November 2020.


Last week saw the Fed’s first rate hike since 2018, a quarter-point increase that promises more increases ahead, as the central bank battles inflationary pressures escalated by the war in Ukraine.

As President Joe Biden and his Chinese counterpart Xi Jinping discuss how to deter further armed escalation in Eastern Europe, the US president hopes to persuade Beijing not to fund Russia’s attack on Ukraine. US Secretary of State Anthony Blinken reportedly said in a briefing Thursday that a diplomatic solution to the war in Ukraine appears difficult, as Russia shows no signs of abandoning its attacks.

Meanwhile, St. Louis Fed President Jim Bullard said the central bank risks losing its credibility by moving too slowly to bring down inflation. In a statement, Bullard made his only opposition to the Fed meeting on Wednesday, when he called for a 50 basis point hike in the federal funds rate. Bullard said he wants to see key interest rates at 3% by the end of the year. Meanwhile, Fed Governor Chris Waller told CNBC that the central bank may need to raise one or more 50 basis points in response to rising inflation.

Technically, the index continued its rise in its recent trading, to succeed in surpassing the resistance of its simple moving average for the previous 50 days. It is also to attack the ceiling of that descending corrective price channel that limits its recent trading in the short term, as shown in the attached chart for a (daily) period, supported by the influx of positive signals by strength indicators. It is relative, despite reaching the areas of severe overbought.

Therefore, our expectations indicate more rise for the index during its upcoming trading, especially throughout its stability above the level of 34,179.00, to target the resistance level of 35,479.

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