US Dow Jones Industrial Average (DJI) – Trend is still strong and intact

Wall Street was bullish last month as investors were anticipating favourable outcome from the 2-day FOMC policy meeting end September. The DJI climbed 125.90 points or 1.3% in a month to close at 9,665.19 points. The benchmark index went as high as 9,918 points but failed to hold after the FOMC meeting ends and the Fed announced that the US economy is on the road to recovery. Investors were quick to sell on news and the appreciating US dollar which caused commodity prices to decline adds the pressure.


Weekly DJI chart as at 25 September 2009 using NextVIEW Advisor

Despite the selling pressure in the past few days, the technical indicators are still positive. Momentum indicators are on the positive side, slightly above its mid-level. The trend is still strong and intact. The market would remain bullish if it stays above the support level at 9,100 points. There is a support from the short term 30-day average which is currently at 9,550 points. The DJI is expected to test this moving average level and if it is able to stay above this level, we may see the trend continue and make new highs. Earlier, an inverted Head and Shoulder pattern was confirmed with a level objective of 11,600 points.


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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.