US Dow Jones Industrial Average (DJI) – Momentum indicators are neutral

Investors in the US were startled by Dubai’s debt problems on their national holiday celebrating thanks-giving Thursday. The panic caused investors to sell on Friday and this caused the DJI to fall 154.48 points or 1.48% to close at 10,309.92 points. The DJI went as low as 10,231 points intraday before rebounding to close higher. On the last day of November, the DJI slightly rebounded to close at 10,344.84 points. The selling pressure was not as bad as expected despite heavy losses in the Asian and European markets when US was on holiday. The selling pressure was buffered by improve consumer spending, improved jobless claims and home sales.


Daily DJI chart as at 30 November 2009 using NextVIEW Advisor

Trading volume was unexpectedly low as investors were not rushing to sell, but prefer to hold on and wait for further developments. The DJI is currently still in an uptrend supported strongly by 60-day moving average. The 60-day moving average is currently at 9,900 points and the DJI is expected to pullback to this immediate support level. Momentum indicators have gone into the neutral zone, but in the long term, the uptrend is still strong because these indicators in convergence with the uptrend. If the immediate support level is broken, the DJI may fall further into correction and find support at 9,700 points. However, if the immediate resistance level at 10,500 points is broken, the market may rally strongly to the next resistance level at 10,700 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.