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The Dow Jones Industrial Average has posted 6-days of gains after the last 7-days of trading as the blue-chip heavy US index shows strong signs of turning technically bullish once again.
Traders have swept aside fears about the Ukraine, and some stocks inside the DJIA are starting to move back towards, and even above their pre-Ukraine price levels, which is staggering.
The DJIA is now starting to approach the 35,000-resistance level which is a massive market pivot. Should we see the index trading above the 35,000 level the upside acceleration could explode.
With the Dow Jones Industrial Average approaching the 35,000 level, the index’s 200-day moving average is also located around this key level, making it even more important technically.
Big psychological numbers are closely watched by stock trading, meaning that the break of the 35,000 level is very important. With a coming break of the 200-DMA and the 35,000 level the Dow Jones Industrial Average could easily explode.
Additionally, historical sentiment data clearly shows that traders are neutral and not all extremely bullish towards DJIA as it starts to approach the 35,000 level. This could be bullish as the retail crowd looks the other way.
According the ActivTrader sentiment tool some 50 percent of traders are bullish towards the DJIA. If we see sentiment starting to turn bearish, I suspect it could serve to speed up the bulls’ case here.
Dow Jones Industrial Average Short-Term Technical Analysis
The four-hour time frame shows that a head and shoulders pattern has officially been invalidated. These patterns are typically amongst the most bearish reversal patterns, so big upside moves can happen when they are invalidated
According to the size of the pattern, the overall bullish invalidation target could provoke a move towards the 36,000 level could take place, as the pattern holds an upside projection of around 2,000 points.
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Dow Jones Industrial Average Medium-Term Technical Analysis
Looking at the daily time frame, the trend is still bearish, and the price is currently very close to the DJIA 200-day moving average, currently around the 35,000-resistance level.
Typically, we need to see a few days back above the 200-day moving average, and then trend traders jump in, and we could then see a massive price move to the upside for the DJIA.
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