Watch These Key Dow Jones Industrial Average Levels After New Record High
The Dow Jones Industrial Average closed above 42,000 on Thursday, setting a new record high. Investors will be closely watching the index on Friday to see if it can maintain its momentum after the Federal Reserve’s half-point rate cut.
Index Moves Higher After Retesting Ascending Triangle
The Dow Jones Industrial Average formed an ascending triangle on its chart between July and September. After breaking out above the pattern’s top trendline on Monday, the index retested the breakout area before continuing its move higher on Thursday. The relative strength index (RSI) confirms bullish price momentum, but also increases the possibility of pullbacks within the index’s longer-term uptrend.
Upside Price Target Using Measuring Principle
To forecast an upside target for the Dow Jones Industrial Average, investors can use the measuring principle. By calculating the distance between the ascending triangle’s two trendlines at their widest point and adding that amount to the breakout area, a target of 44,700 is projected.
Key Pullback Levels to Watch
During periods of weakness, investors should monitor three key levels on the Dow’s chart:
- 39,900: This level, below the ascending triangle’s lower trendline, may find support near several important peaks and troughs that formed on the chart between March and July.
- 39,200: An area that encounters a confluence of support from the upward sloping 200-day moving average and a horizontal line linking a range of comparable trading levels from February through early August.
- 37,800: A breakdown below the previous level could see a larger decline to this region, likely to attract buying interest near a period of January consolidation, which corresponds with two closely aligned troughs in April and May.
Investors will be watching these levels closely as they could indicate potential buying opportunities or further downside risk for the Dow Jones Industrial Average.
It is important to note that the comments, opinions, and analyses expressed in this article are for informational purposes only. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.
As of the date this article was written, the author does not own any of the securities mentioned.
Source: Investopedia
