Dow Jones Immediate Resistance Is Around 27700

08 July 2020

Dow Jones is looking to resume lower towards 23000 over the short term. The indice had managed to carve a lower high at 27700 levels in early June 2020. It is acting as immediate resistance and the indice is expected to remain below the 27700 mark.

Let us have a look at the larger degree potential wave counts first. The drop between 29600 and 18200 can be clearly sub-divided into 5 waves, making it an impulse wave labelled as Wave (1) on the chart. As discussed earlier, an impulse is normally followed by a corrective wave.

Dow Jones had rallied from 18200 through 27700 sub-dividing into 3 waves, hence corrective. This counter trend rally has been labelled as A-B-C, terminating into similar degree Wave (2). If the above holds true, Dow Jones must stay below 27700 and resume lower towards 23000 and beyond.

Further, also note that the counter trend rally, Wave (2) had managed to reach fibonacci 0.786 retracement of Wave (1), a typical guideline of the Wave Principle. A potential Wave (3) of larger degree might be underway since 27700 highs.

Looking further into lower degree wave counts; the drop between 27700 and 24843 was again in 5 waves, labelled as Wave 1 on the chart. Wave 2 might have unfolded as a running flat and might be complete at 26300/400 levels.

If the lower degree counts hold well, Dow Jones must proceed lower from here and push through the 23000 mark. The fractal nature of markets can be seen at all degrees, where the classic pattern 5-3 is repeated over and over again.

Overall, Dow Jones remains a candidate to be sold on rallies, until prices stay below 28000 levels, ideally.

Prepared by
Technical Analysis Team

Disclaimer: This information has been produced by a third party, for general information purposes only, and is not indicative of future results. Abans Global takes no responsibility for its accuracy or completeness. Any opinions expressed do not reflect those of Abans Global. This information does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should seek independent advice before making investment decisions. Reproduction of this information, in whole or in part, is not permitted. Please note: If you are a Professional client, you are not eligible for negative balance protection and you could lose more than your initial deposit.

Trade with
Abans Global

  • Authorised and Regulated by FCA
  • Customer Support 24/5
  • Low Spread & Commission
  • Instant Execution
  • No Dealing Desk
Interested in knowing more about our products

Simply send an e-mail to us at: support@abansglobal.co.uk
Contact us on +44(0) 203 936 9000

We will be happy to address all your queries

Our Products

Offering state of the art execution services through multiple top-tier liquidity providers. Abans Global provides you with a tailor-made solution to match the demanding requirements of your business, with the multi-assets offering, advanced trading platforms and FIX API connectivity that provides ultra-low latency.

Forex

Forex

Know More

View more
Cfd’s

Cfd’s

Know More

View more
Equities

Equities

Know More

View more
Indices

Indices

Know More

View more
Commodities

Commodities

Know More

View more

Create Demo Account

Try Demo

Create Live Account

Sign In