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The Dow Jones Industrial Average (DJI)broke and closed last week below its 1W MA200 (red trend-line), for the first time since the week of May 11 2020, a very bearish sign on its own. Based on what the index did on May 09 2022 after breaking the previou Support (Double Bottom), the price now targets the -0.236 and -0.5 Fibonacci extensions on the medium-term.<\/p>\n
Being however oversold with the 1D RSI hitting 24.85 yesterday for the first time since the COVID crash (March 12 2020), there is an equal probability of a short-term rebound or even a medium-term one if this is a temporary bottom like June 17. With signals on the higher and lower time-frames being mixed, the oversold RSI state isn’t enough on its own to take the buy. It would be best to do so after a confirmation pattern.<\/p>\n
The two strongest confirmation signals at the moment are:<\/p>\n
1) When the 1D MACD makes a Bullish Cross, which since December 07 2021 always delivered a short-term rally.<\/p>\n
2) A closing above the 0.618 Fibonacci level (now at 31357).<\/p>\n
If you take those buys, you will have some ground behind them. Otherwise the are within the 0.618 and yesterday’s lows gives a mixed sentiment. Below yesterday’s lows, most likely we will see further strong selling, initially targeting the -0.236, as mentioned, at 28230.<\/p>\n
Tradingview link:<\/p>\n