Quick Charts – Dow Jones Indices Market Analysis

*Quick technical analysis of the Dow Jones Index price charts*

Here is my “quick charts” technical analysis for the Dow Jones Index that I am currently buying on the intraday timeframe up to the 26800.00 zone where I intend to short the US index.

I will start with the list of confluences I am using in this analysis.

Weekly Timeframe Chart – 4 consecutive bearish weekly candle closures.

Daily Timeframe Chart – Lower high made and 27,350 resistance appears to be holding strong.

4 Hour Timeframe Chart – 26800 support level broken. Lower low made last week. Bearish trendline across the multiple lower highs.

Dow Jones Index daily timeframe chart

The chart above has all of my confluences shown on it. The double top rejection of the upper resistance zone is clear and you can also see how 26,800 was acting as a good support for price until it broke last week. Therefore I am of the opinion that this zone will now act as a strong and prominent resistance for price.

However… I have also marked on the clear daily higher lows that are forming on this chart. This is the only issue I have with this set up but i do believe the reward:risk ratio is high enough for me to warrant taking the trade with a potential return of over 8R with a conservative stop loss.

If price does form a 2nd daily lower high at the 26,800 level then I would expect a lower low to be made and therefore clear confirmation that the daily trend is reversed. I can then continue to look for sell side opportunities.

Dow Jones Index 4 hour timeframe chart

The chart above is a slightly lower 4hr timeframe chart. As you can see, price is pulling back nicely towards my sell zone at the 26,800 region. I am currently buying the Index on the daily in order to try and profit from this counter trend. It will also allow me to build up a net long position and will allow me to enter a larger short position in the future with lower net risk.

As it stands, I expect the Dow Jones to slowly creep upwards with smaller pullbacks until it gets to the 26,800 support zone. If I see some 4hr rejection candles form in that zone then I will enter short positions.

Contingency Plan:

As always, this initial plan may not go ahead if price doesn’t reach my zone and this is a big possibility with the current US trade war rumours and frequent news announcements.

I will therefore keep an eye on the lower timeframe waves and if the counter trendline is broken I will look for a possible flag pattern entry or trendline break & retest to gain short position exposure.

I will not enter simply on a break of the bullish counter trendline or just the first touch of the 26,800 zone. I want to see clear rejections of that resistance zone.

Dow Jones Index 4 hour timeframe chart
(contingency plan entry)

Thanks for reading and stay safe out there! This is not a “trade signal” or financial advice. It is important for you to do your own analysis and I only do these blog posts to show you how I am analysing the charts.

DISCLAIMER: None of the information posted on this site is to be considered investment/financial advice. Trading is high risk and you should only trade with money you can afford to lose.

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