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Dow Jones Ready to Breakout

By Declan FallonStock MarketsNov 21, 2022 03:18
ca.investing.com/analysis/dow-jones-ready-to-breakout-200537507
Dow Jones Ready to Breakout
By Declan Fallon   |  Nov 21, 2022 03:18
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US500
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Markets eased back from their weekly highs last week on declining volume, but has been a fairly orderly move lower. Support levels are there for indices to lean on. 

The Nasdaq has its 50-day MA alongside its 20-day MA to use as support. The 'black candlestick' is typically a bearish one-day candle, but as it's not positioned as a swing high it carries less weight. Technicals are net positive, although there is a return to underperformance against the S&P 500. An ideal candlestick would be a gravestone 'doji' or a bullish hammer as an end point to this decline.

COMPQ Daily Chart
COMPQ Daily Chart

The S&P is lingering just below its 200-day MA and above the October swing high. Volume climbed to register as an accumulation day, and the sequence of recent buying days was enough to generate a 'buy' trigger in On-Balance-Volume.

SPX Daily Chart
SPX Daily Chart

The Russell 2000 returned to its 200-day MA, and is running along 20-day MA support. After a strong period of outperformance relative to the Nasdaq the relationship has flat-lined, but other technicals are net bullish. The squeeze of the 200-day and 20-day MAs may be the catalyst for the next move. 

IWM Daily Chart
IWM Daily Chart

The index which is enjoying the best performance is the Dow Jones Industrial Average. It has shaped a nice handle just below the August swing high and is set up for a significant breakout. Technicals are net bullish with an improving trend in on-balance-volume accumulation.

INDU Daily Chart
INDU Daily Chart

In the grand scheme of things, Friday's action was generally positive. The Dow Jones Industrial Average looks like it will lead the indices out and I would be looking for the S&P to soon follow suit. 

Dow Jones Ready to Breakout
 

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Dow Jones Ready to Breakout

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Toor Mehdi
Toor Mehdi Nov 21, 2022 3:53
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