Dow Jones Holds Below 29200 Resistance

23 September 2020

Dow Jones seems to remain in control of bears after having carved 29200 potential resistance. The indice had dropped through 26700/800 lows before managing to pullback. Short term resistance should be strong around 28000.500 mark and bears might want to turn lower from there.

Dow Jones probable wave structure is as follows: The indice has kept the classic Elliott Wave pattern 5 Wave Down, followed by 3 Waves UP intact until now. It has dropped in 5 waves from 29600 highs through 18200 lows in March 2020.

Further, the counter trend rally towards 29200 has unfolded into 3 waves. If the above structure remains intact, Dow Jones should produce another 5 waves lower towards 18200 to complete a 5-3-5 wave structure. The indice might have resumed lower from 29200 mark.

Looking at the lower degree wave counts since 29200 highs, the indice has managed to carve potential waves 1 and 2 around 27450 and 28350 respectively. If the above structure holds true, the indice should remain below 28350 and broadly below 29200 levels going forward.

Furthermore, bears are expected to remain in control as Wave 3 progresses further. Immediate resistance is seen through 28350, while interim support is seen towards 26000 levels respectively. Intraday rallies from here should remain capped below 29200 levels.

Traders might be willing to hold on to shorts initiated earlier and also look to sell more if prices reach 28500 levels going forward. The protective stop remains above 29600 mark while projected targets remain towards 26000, 23000 and beyond.

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