US DJI: Expected to test next resistance level

Sentiments have improved since the Bear Sterns episode and the intervention of the central bank and this sent the DJI to break above the resistance level at 12,800 points a few weeks ago and stay above it. The DJI closed at 13,057.80 points on the 2nd of May. It is now facing a maximum resistance level that defines the underlying down trend at 13,200 points and the DJI is out of the down trend if it breaks and stays above this level.

The momentum of the current short term up trend is strong and therefore the DJI is likely going to test the 13,200 points resistance level. Furthermore, the confirmed inverted head and shoulder pattern formed on the DJI chart since earlier this year has a price target of 13,600 points. Support level is now at the previous resistance level, which is 12,800 points. By Benny Lee