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The Dow Jones Industrial Average struggling at 30,000 resistance

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The Dow Jones Industrial Average continues to trade in a bull market and traders are ignoring record coronavirus contagions in the US. The positive news is that the U.S. Food and Drug Administration is likely to approve the coronavirus vaccine by the mid of December.

The Dow Jones Industrial Average (DJIA) remains in a “bull” market supported by hopes of a COVID-19 vaccine and data showing a rapid expansion in monthly business activity. Lots of companies have reported better than expected earnings results and the US the added 638K new jobs in October. The unemployment rate fell to 6.9% from 7.9 which is much better than anticipated.

Due to Thanksgiving Day in the US, this trading week will be shorter but according to the market sentiment, DJIA could advance above 30,000 once again. The Dow is trading currently just a few percentage points below its all-time high and as long the Dow is above 28,000 points there is no risk of the trend reversal.

Despite this, concerns amid the ongoing pandemic continue to dominate the financial markets as the US reported over 200K new cases in one day. The world reported over 11,700 new coronavirus deaths last Friday which is the worst day since the pandemic began.

The U.S. Food and Drug Administration is likely to approve the coronavirus vaccine by the mid of December which could give another boost for this index. It seems for now that the worst has been avoided but further turmoil should not be discounted for the US stock market.

“There’s good news on the coronavirus vaccine and that’s building a lot of enthusiasm in a short trading week, but the enthusiasm might be getting a little bit overdone,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Technical analysis: Positive trend remains intact

The Dow Jones Industrial Average (DJIA) has found strong support above 29,000 points but it is still not able to surpass 30,000 points which represent the current resistance level.

Data source: tradingview.com

It is also important to say that 28,000 points represent a very strong support level and as long the price is above this support there is no indication of the trend reversal. If the price falls below 28,000 points it would be a strong “sell” signal and we have the open way to 26,000 points.

The U.S. Food and Drug Administration is likely to approve the coronavirus vaccine by the mid of December and if the price jumps above 30,000 points the next price target could be located around 30,500.

Summary

The Dow Jones Industrial Average continues to trade in a bull market but the correction cannot be discarded. The U.S. Food and Drug Administration is likely to approve the coronavirus vaccine by the mid of December which could give another boost for this index. If the price jumps above 30,000 points the next price target could be located around 30,500 but if the price falls below 28,000 points that could be a signal of the trend reversal.

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