Dow Jones drop ahead of Jobs Report; S&P 500 Outperforms


The Dow Jones drop below the ”round number” 20,000 level and traded flat in 91 point range exploring both sides of breakeven. Is Dow bullish or bearish?

3 February, AtoZForex – The Dow Jones Industrial average traded flat on Thursday trading session, down 0.03 percent to 19,884.91 points. The S&P 500 surged 0.06 percent to 2,280.85 points and Nasdaq composite Index falls 0.11 points to 5,636.20 points. The Dow Jones is trading at the consolidated zone of 19,000-20,000 after President-elect Donald Trump’s stock market rally.

03dowchart

Dow Jones drop below 20,000 levels

While the Dow couldn’t keep its head above water even with a positive earnings reaction for Merck & Co., Inc. and the Nasdaq Composite followed Facebook Inc’s post-earnings path lower. The S&P 500 and Nasdaq 100 Index outperformed its peers, seeking out a modest gain. The 14 Dow Jones industrial average winners were led by MRK, which surged 3.3%. The 16 decliners were rallied by Caterpillar Inc. which dropped 1.4%.

Dow Jones Technical analysis

I expect the Dow Jones to reach the target of 20,000 again. The technical indicators and moving averages signify strong buy for the index in the weekly basis. Most noteworthy, the relative strength index is 66.556 which is ‘BUY’ and STOCH(9,6) display value of 97.802 which also means ‘BUY’. According to Moving average convergence and divergence analysis MACD (12,26) value is 551.820 gives ‘BUY’ signal. In addition, the ultimate oscillator indicator display value of 63.607 which again signify ‘BUY’. The ATR(14) shows the Dow Jones is less volatile and value is 317.4216 which means the index is less volatile.

 

03dow-tech Dow Jones technical analysis charts (click to zoom)

 

The simple moving average for a period of MA200, MA100, MA50 and MA20 is 17103.38, 17862.67, 18378.80 and 19106.70 respectively. All the moving average gives ‘BUY’ signal. Furthermore, the support levels and resistance levels are S3 19449.02, S2 19590.69, S1 19842.24 and R1 20235.46, R2 20377.13, R3 20628.68. All the indicators display ‘BUY’ signal and the index is highly bullish in the mid-term.

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