Dow Jones Industrial Average (DJIA) or DOW in short, is having a tango with its 200days SMA for over two weeks now. But there is no sign of its trending above this average decisively. Yet, the trending down of this average itself is a good sign. Now, this index needs some triggers which are not in sight for the moment. The forthcoming earnings season may help it take some direction.
The picture on daily chart above is not very pretty for the short term. RSI has negative divergence and MACD is also trending negatively. But weekly chart is not so negative. It implies that the short term is sideways to negative while medium term would turn negative only if it gives a weekly close below its 50days SMA.
Immediate short term Resistances are at 8620, 8670 and 8720. A close above 8720 is needed to breakout of the upper range around 8900.
50days SMA, currently around 8375 may be taken as exit point for short term long positions. Medium term traders may buy on declines with 7950 as a strict stop loss. A close below here would threaten the previous lows.
