Market Technical View is a blog that mostly concerns the technical analysis of different financial instruments like indices, commodities, stocks, ETFs and currencies.

All the posts are structured in 3 main chapters that can be found in Content, in the upper right-hand corner of the blog.

Market perspective. The technical approach consists of chart patterns and important support/resistance zones. The purpose of this section is to give directions of the price on short and medium term (a few days up to a few months).

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Wednesday, September 28, 2011

Dow Jones Industrial Average (DJIA) Technical Analysis 2011.09.28

Last trading hour on NYSE might give a signal

The positive sentiment of the last few days pushed the Dow Jones Industrial Average higher, breaking up the 11,267 resistance.

However, the last hour of spot trading said a lot about the strength of the bulls. The clear domination of sellers in last hour is a key factor in determining the weakness of the current up move. This same market personality can be found before the 20th September peak.

The closest resistance is set now in the 11,375 area and an eventual failure below it (it doesn’t have to get too close to it) will set the market for a down move in the next days. The first target in case of a reversal is set in the 10,950 area and it is followed by the 10,550 area as a strong support. 

On the 4 hour chart the T1 line has a clear resistance function now (it was a strong support before) and this could stop the rally before it gets to the 11,534 horizontal resistance. 

The price action in the month of September was choppy and large stop losses are needed in case of trading the swings.

One interesting (and important) fact is that we are at the end of a quarter and this could lead to bullish support until the end of the month (same as the end of week). Therefore, this area could be a reversal one but we could see new highs or sideways move in the next 3 sessions.

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