The Dow Jones Industrial Average index is once again near its all-time high of 27403, which was hit on July 15th. The index is also trading above a short-term tentative upside support line taken from the low of June 13th. For now, everything seems to be quite positive for the short-term outlook, but before DJIA could travel further north, it may correct slightly to the downside, as our oscillators are currently showing a small pause in the upside momentum. This is why for now, we will stay cautiously bullish.
If the price slides a bit lower but stays above the 27204 area (the low of July 23rd), or even above the aforementioned upside support line, we will consider such a move as a temporary correction, before another leg of buying. We will once again target the 27403 barrier, which is currently the all-time high, a break of which would confirm a higher high and would place DJIA into an uncharted territory. One of the next possible targets may be the area around the 27500 level.
Looking at our oscillators, the RSI and the MACD, both are showing slowing upside momentum. The RSI, after crossing the above-50 territory, has now flattened somewhat near that mark. The MACD, even though still above zero, is now flirting with its trigger line and points a bit lower. Both indicators seem to be in support of a small throwback first.
Alternatively, a break of the above-mentioned upside line and a price-drop below the 27100 hurdle, marked near the lows of July 21st and 22nd, could spook the buyers and allow more sellers to step in. The index may drift further south, aiming for the psychological 27000 zone, which is near the highs of July 3rd, 4th and 5th. If the price rebounds from there, but still stays below the aforementioned upside line, this could lead to another round of selling. A drop below 27000 might clear the path to the 26820 level, marked by the intraday swing high of July 10th.
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