Dow Jones & Nasdaq 100 Wrestle With Resistance, Are They At Threat?

Dow Jones & Nasdaq 100 Value Outlook:

Dow Jones & Nasdaq 100 Wrestle With Resistance, Are They At Threat?

Shares have endured a little bit of backwards and forwards value motion this week as merchants react to the probability of a second stimulus aid bundle. After initially falling as President Trump introduced by way of Twitter that one other program must wait till after the election, losses had been quickly reversed alongside a simultaneous rollback from President Trump. Consequently, it appears fiscal stimulus stays the driving drive behind fairness markets this week and in any case that has transpired, little has been achieved.

Suffice it to say, traders are left with basically the identical questions that they had getting into the week and the value of the Dow Jones and Nasdaq 100 displays that. Thus, it appears doubtless ongoing discussions between Democrats and Republicans concerning stimulus will proceed to be the principle influencer behind fairness value motion within the shorter-term. However, the Dow Jones and Nasdaq 100 have already begun to probe overhead resistance, does that put them liable to one other reversal?

Dow Jones Technical Outlook

Within the case of the Dow Jones, value has climbed to an vital space of help turned resistance. The road was initially derived from the index’s June low, however has since reaffirmed its affect after a collection of profitable holds in October. Critically, the ascending band could mark the topside of a rising wedge – sometimes seen as a bearish technical formation.

Dow Jones Value Chart: 1 – Hour Time Body (September 2020 – October 2020)

As proven within the chart beneath, the Dow has labored itself right into a rising wedge and could also be liable to a bearish reversal. Whereas it’s troublesome to make such calls with confidence given the uneasy basic panorama and the considerably unreliable nature of technical patterns, the formation is undoubtedly noteworthy. A technical dealer may view the world above the band as a zone of invalidation, whereas wanting beneath the rising trendline from late September for areas of curiosity.

Dow Jones Value Chart: 4 – Hour Time Body (June 2020 – October 2020)

Nasdaq 100 Technical Outlook

The Nasdaq, then again, has developed no such wedge and has as a substitute encountered resistance within the type of a horizontal band derived from prior swing highs across the 11,580 mark. If damaged, bulls could look to proceed greater with relative ease till doable secondary resistance materializes across the 11,782 space.

Nasdaq 100 Value Chart: 1 – Hour Time Body (September 2020 – October 2020)

Ought to bears take management of value motion previous to a bullish break greater, the Nasdaq 100 appears to lack notable help till the Fibonacci stage at 11,360 and a subsequent space of potential help round 11,200. To make certain, each the Dow Jones and the Nasdaq 100 seem susceptible at the moment, however there may be nothing to recommend a bearish reversal is imminent. Within the meantime, comply with @PeterHanksFX on Twitter for updates and evaluation.

–Written by Peter Hanks, Strategist for DailyFX.com

Contact and comply with Peter on Twitter @PeterHanksFX