How well is Dow Jones Recovering?
What has happened:
Dow Jones continued to climb and broke previous high 23900 last Friday as the market reopened with a huge upward gap.
The price has ranged throughout the week and lower highs started to form too.
The selling looked promising as strong bearish candlesticks were created as well.
But after multiple failed attempts to break a support level 23100 over an extended period of time, the bear lost its footing and the price climbed steadily during the last hour just before the market closes in the last 2nd trading day and eventually led to a huge upward gap that resulted in the break of a new high.
The price started to pull back from its new high at 24300 and found support slightly below the previous high but has recovered significantly with a final closing price of 24275.
What now:
While it seems that the Dow Jones is still recovering steadily, things could change in this week as the price is coming to the end of a rising wedge formation beginning from 23rd March 2020.
The price is also trading between the Fibonacci retracement level of 50% and 61.8% and 2 major bullish waves have completed which could lead to a reversal if strong resistance is seen in this week.
The recovery was mostly stimulated by the stimulus package that the Fed and the US government have been providing due to the COVID-19 which simply means that the price is artificially jacked up.
In the short run, the price could still make it higher anywhere before 25000.
The supply zone between 25000 and 26000 will be very critical in providing strong resistance and attracting major sellers which could also lead to a potential selloff from those who are buying the artificial recovery.
Dow Jones continued to climb and broke previous high 23900 last Friday as the market reopened with a huge upward gap.
The price has ranged throughout the week and lower highs started to form too.
The selling looked promising as strong bearish candlesticks were created as well.
But after multiple failed attempts to break a support level 23100 over an extended period of time, the bear lost its footing and the price climbed steadily during the last hour just before the market closes in the last 2nd trading day and eventually led to a huge upward gap that resulted in the break of a new high.
The price started to pull back from its new high at 24300 and found support slightly below the previous high but has recovered significantly with a final closing price of 24275.
What now:
While it seems that the Dow Jones is still recovering steadily, things could change in this week as the price is coming to the end of a rising wedge formation beginning from 23rd March 2020.
The price is also trading between the Fibonacci retracement level of 50% and 61.8% and 2 major bullish waves have completed which could lead to a reversal if strong resistance is seen in this week.
The recovery was mostly stimulated by the stimulus package that the Fed and the US government have been providing due to the COVID-19 which simply means that the price is artificially jacked up.
In the short run, the price could still make it higher anywhere before 25000.
The supply zone between 25000 and 26000 will be very critical in providing strong resistance and attracting major sellers which could also lead to a potential selloff from those who are buying the artificial recovery.
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