The Dow Jones Industrial Average (DJI) is now pushing into a cluster of resistances.
Can the rally continue?
The current rally from 15,370 is now testing its 200-day SMA.
Overhead, there are several resistances namely its LT support turned resistance trend line from the 2011 lows (at 17,620).
The resistance trend line from the 18,351 highs comes in at around the 17,800 levels while the 78.6%FR level of the previous fall is at 17,712.
If the bulls can muster a strong push above the resistance band of 17,620-17,800, then there is a good probability of new highs for the DJI in the coming months.
Until then, it is best to remain neutral at this moment. A sharp reversal from here or marginally higher would put the bears back on alert again.
Only falling back below 17,000 would give the bears hope of a revival. Tomorrow’s FOMC meeting could add some volatility to the market after a ‘quiet’ 2 days this week. (Read Report)
Source : CIMB Research