Is the Dow Jones Ripe for a Correction?
2023.11.30 03:46
After rising so fast in a short period of time, is it time for a correction in the Dow? It should not be a surpise because the markets do not go up in a straight line. It corrects and then moves higher in the long run.
The is now sitting at a resistance area. Let’s take a look at the charts and see what we can learn from it.
daily chart of Dow Jones Industrial Average
The chart above shows the daily chart of the Dow Jones Industrial Average. You can see how it has traded back to the former highs. This will be a resistance area and that is why it is finding it hard to move higher.
I won’t be surprised if it needs some time to correct or trade sideways. In fact a sideways correction is good because it allows the index to rest before moving up higher.
What I am worried about is the MACD is about to issue a sell signal. You can see how in the past the Dow has corrected when the MACD lines give a sell signal. So this is something for us to keep in mind.
60 min chart of Dow Jones Industrial Average
To gauge the short term trend, I always like to take a look at the 60 min chart. The above shows the 60 min chart of the Dow.
One good thing is there are layers of 60 min support areas below which I have highlighted in green. But do be careful if the Dow drops below the 60 min 50 MA. What you don’t want to see is for Dow to drop below the support areas.
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