US Dow Jones Industrial Average (DJI) – Market may have bottomed out

The 8,870 points resistance level was broken and the DJI made a new year 2009 high last month and closed at 9.171.61 points end July. Market sentiment continues to be bullish despite mixed views about how the economy is recovering in this world’s largest economy. Despite not performing strongly like the Asian markets, the DJI still managed to climb 724.6 points or 8.6% in one month. So far, the DJI has increased 40% from the low in March this year and retraced about 35% from the end-2007 to early-2009 bear trend.


Daily DJI chart with volume as at 31 July 2009 using NextVIEW Advisor Professional

The strong bullish rally last week has caused the momentum to become strong again. The RSI, ADX and Momentum indicators continue to make new highs since early July. With this strong momentum, there is a high chance that the uptrend rally can be sustained and the next resistance level to test is 9,400 points. The long term inverted head and shoulders pattern is an indication that the market my have bottomed out and can only be confirmed once this resistance level is broken. Support level is at 8,100 points.

****

Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.