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Dow Jones Technical Analysis: Recouping Some Losses

We expect the index to return to decline during its upcoming trading.

The Dow Jones Industrial Average rose during its recent trading at the intraday levels, to break a series of losses that continued for four consecutive sessions. It achieved gains in the last of them by 2.00%, to add the index to it about 653.61 points and settle at the level of 33,286.26, after it declined in Tuesday’s trading by -0.56 %.

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With a trading volume of more than 421.5 million sheets, all 30 components of the index rose, except for only four stocks. The shares advanced by a percentage. Salesforce.com Inc. by 5.77%, and American Express Co. by 5.37% and Nike Inc. Cl B by 4.74%.

Europe’s largest land war since 1945 has caused commodity markets to crash and raised inflation fears, threatened global energy security, and led to a wave of major companies pulling out of Russia.

Yesterday, however, tensions eased after the announcement of attempts at diplomatic solutions, as the foreign ministers of Ukraine and Russia are scheduled to meet in Turkey on Thursday for the latest rounds of talks. However, it seems that the situation on the ground has not changed much, and the news of the Russian advance towards the Ukrainian capital Kyiv followed, but this announcement helped revive the risk appetite of exhausted investors in the past days.

In economic reports, job opportunities in the United States fell slightly in January to 11.3 million after setting a record at the end of 2021, but millions of workers continue to quit every month in what has become known as the “Big Resignation”.

The Labor Department said on Wednesday that the number of open jobs decreased from a revised 11.5 million December. The jobs data comes ahead of the February CPI and ECB policy update, which could be pivotal for investors.

Technically, the index is trying with this recent rise to compensate for some of its previous losses, amid the dominance of the corrective bearish trend in the short term. The index was affected by its exit from the range of a rising price channel that limited its previous trading, as shown in the attached chart for a (daily) period of time, with continued negative pressure due to its trading below the simple moving average for the previous 50 days, in addition to the start of negative signals on the relative strength indicators.

Therefore, we expect the index to return to decline during its upcoming trading, if the main resistance 34,000 remains intact, to target the support level 32,071.40.

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