Courtesy of John Nyaradi.
Recent rally brings Dow Jones Industrial Average up to significant resistance levels.
After the recent sharp sell off, the Dow Jones Industrial Average (NYSEARCA:DIA) and S&P 500 (NYSEARCA:SPY) are now back at significant resistance levels which will have to be broken for a meaningful uptrend to reemerge.
In the chart of the Dow Jones Industrial Average (NYSEARCA:DIA) above, we can see how the index stopped just at its 50 day moving average which is a significant resistance level.
Just above lies significant resistance in the 15,15,300 level which will provide headwinds against a move higher.
The point figure chart below shows a similar picture for the Dow Jones Industrial Average (NYSEARCA:DIA)
Here we see that the Dow Jones Industrial Average (NYSEARCA:DIA) is still on a “sell” signal with a downside price objective of 13,850 and the same area of resistance is visible. A break above 15, 250 would be required to register a new “buy” signal.
Bottom line: Even though the Dow Jones Industrial Average and other major U.S. indexes have bounced off recent lows, there is much work to be done to return these indexes to bull market configuration.
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