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Dow Jones Technical Analysis: Trying To Recoup Some Losses – 24 May 2022

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Our expectations suggest a return to the index’s decline during its upcoming trading.

The Dow Jones Industrial Average rebounded, rising during its recent trading at intraday levels, to achieve sharp gains in its last sessions, by 1.98%, to add to it about 618.34 points. It settled at the end of trading at the level of 31,880.25, after its decline in Friday’s trading by -0.03 %.

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Twenty-seven of the index’s 30 components rose, led by percentage in percentage terms: JPMorgan Chase & Co. which recorded a gain of 6.19%, after the bank raised its expectations for the entire year 2022 for net interest income. It reached more than 56 billion dollars from the original expectations in January, which amounted to about 50 billion dollars, and this affected all the financial sector positively. The second listed stock on the index to achieve a percentage gain was Visa Inc. Cl A by 4.29%.

Wall Street advanced with support from President Joe Biden’s statements that he is considering cutting tariffs on China imposed by former President Donald Trump. A new economic agreement was also announced on Monday with 12 Indo-Pacific nations, which account for about 40% of GDP. The agreement aims to counter China’s influence. While the market seemed to have ignored his comment that the US would defend Taiwan in the event of an attack on the mainland, the White House later played down his comments.

Technically, the index is trying with this rise to compensate for part of what it incurred from previous losses. It is trying to drain some of its clear oversold by the relative strength indicators, especially with the beginning of a positive crossover in them. The index found some support after it relied on its penultimate session to support those the bearish corrective price channel. This channel limits its previous trading in the short term, as shown in the attached chart for a period (daily). It gained it some positive momentum, but it continues to suffer from negative pressure for its trading below the simple moving average for the previous 50 days.

Therefore, our expectations suggest a return to the index’s decline during its upcoming trading, especially throughout its stability below the 32,000 resistance level, to target the support level 30,547.50.

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