Dow Jones (US30) Maintains Strong Bullish Momentum: Is Further Upside on the Horizon?

Konstantin Kaiser•Wednesday, October 23, 2024•3 min read

The Dow Jones Industrial Average (US30) is soaring, fueled by robust bullish momentum. The critical question for traders and investors now is whether this uptrend will sustain or if a short-term pullback is on the horizon.

Dow Jones Industrial Average (US30) Continues Its Upward Trajectory

The Dow Jones Industrial Average (US30) has been in a robust uptrend over the last six months, advancing roughly 16%. Bullish technical indicators on the monthly chart further affirm the strength of this ongoing upward momentum.

Technical Indicators and Trends (Monthly Chart):

MACD (Moving Average Convergence Divergence): The MACD lines have formed a bullish crossover, and the MACD histogram has shown consistent upward momentum for the last four months, indicating a steady strengthening of bullish sentiment.

RSI (Relative Strength Index): The RSI is nearing overbought levels, signaling strong bullish momentum, yet notably, no bearish divergence has formed, suggesting that the rally may have room to continue without immediate reversal risk.

Dow Jones Industrial Average (US30) Is Facing Rejection At Channel Resistance

The weekly chart of the Dow Jones Industrial Average (US30) shows a steady trend within an upward channel. However, US30 is now encountering resistance at the upper boundary of the channel, signaling the possibility of a pullback in the near future.

Technical Indicators and Trends (Weekly Chart):

MACD (Moving Average Convergence Divergence): The MACD lines remain bullishly crossed, yet this week the histogram begins to show bearish ticks, signaling potential waning bullish momentum.
RSI (Relative Strength Index): The RSI has entered overbought territory, though it has yet to issue any clear bearish signals, indicating that further gains are still possible.
EMA (Exponential Moving Average): The intact golden cross between key EMAs confirms a sustained mid-term bullish trend, further bolstering a positive outlook for the Dow Jones Industrial Average.

Should US30 enter a corrective phase, it will find solid support between the 39,843 and 39,987 levels, suggesting a potential downside of approximately 6.4%.

More Mixed Signals In The Daily Chart

The daily chart for the Dow Jones Industrial Average (US30) presents a mix of signals from key indicators, reflecting both bullish and bearish sentiments.

MACD (Moving Average Convergence Divergence): The MACD lines have recently crossed bearishly, with the histogram reflecting a bearish trend over the past few days, suggesting weakening momentum.
RSI (Relative Strength Index): The RSI is nearing overbought levels and is showing a bearish divergence, indicating a potential short-term correction.
EMA (Exponential Moving Average): Despite short-term bearish signals, the golden crossover of the EMAs reinforces a bullish trend for the short-to-medium term, supporting the possibility of continued upward movement.

Overall, while there is potential for further upside in the DJI, a short-term correction toward the 50-day EMA at 41,813 is possible.

Predominantly Bearish Signs in the 4H Chart

The 4-hour chart for the Dow Jones Industrial Average (US30) predominantly displays bearish signals. US30 has already broken below the 50-4H-EMA support at 42,861, suggesting further downside potential. A retracement toward the 200-4H-EMA at 42,146 is possible, where the 0.382 Fibonacci level offers additional support. Should this level fail to hold, US30 could find stronger support at the golden ratio at 41,150.

MACD (Moving Average Convergence Divergence): The MACD lines remain crossed bearishly, though the histogram is starting to show signs of bullish momentum, indicating some recovery potential.
RSI (Relative Strength Index): The RSI is fluctuating within neutral territory, offering no definitive bullish or bearish signals at this moment.
EMA (Exponential Moving Average): Despite the bearish undertone, the golden crossover of the EMAs confirms a short-term bullish trend, reinforcing an overall optimistic outlook.

In summary, while the 4H chart reflects bearish sentiment, key support levels and mixed signals in momentum could stabilize US30 in the near term.

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ABOUT THE AUTHOR See More

Konstantin Kaiser

Financial Writer and Market Analyst

Konstantin Kaiser comes from a data science background and has significant experience in quantitative trading. His interest in technology took a notable turn in 2013 when he discovered Bitcoin and was instantly intrigued by the potential of this disruptive technology.