Past performance is not indicative of future results. All historical data, including but not limited to returns, volatility, and other performance metrics, should not be construed as a guarantee of future performance.
US30 1-Hour Timeframe
The US30 (Dow Jones Industrial Average) has been in a significant uptrend on an hourly timeframe since May 1, 2024. The price rebounded from the lows around 37,750 and has consistently moved upwards, establishing higher highs and higher lows.
The market formed a classical head and shoulders pattern (depicted in red) but failed to break below the neckline. Instead, it moved higher with conviction, forming two very large bullish candlesticks. This move confirmed bullish momentum and drove the price to the all-time high area around the 40,000 level. Currently, the market is trading in a range shown in red.
The long-term trend remains bullish. The 50-period (blue) and 200-period (yellow) moving averages are in a bullish configuration, with the 50-period above the 200-period, indicating ongoing upward momentum. The recent price action shows a pattern of higher highs and higher lows, typical of an uptrend. The RSI is currently around the 70 level, indicating strong bullish momentum, although it has spent some time in overbought territory, increasing the odds of a retracement.
Despite the established uptrend, the market does seem a bit overextended, and a short-term retracement is also a likely scenario. The trigger for this potential setup would depend on a convincing break of the current trading range. If the market breaks below the range with conviction, we can target the 39,430 level (23.6% Fibonacci retracement) and the 39,000 level (close to the 38.2% Fibonacci retracement).
A break below these levels, especially the 39,000 mark, could signal a deeper correction. If the price falls below the 50-period moving average, it would indicate a weakening of the uptrend and a possible invalidation of the longer-term upward view.
If the market breaks out above the 40,000 resistance level, it would likely trigger further buying, potentially targeting higher Fibonacci extension levels. To maximize trend trading opportunities, it is ideal to maintain your view until the market indicates exhaustion.
While the technical analysis suggests a bullish trend, it's crucial to remain cautious and pay attention to fundamental drivers that could shift market sentiment. Economic indicators, geopolitical events, and earnings reports can all impact the market significantly. Traders should keep an eye on news releases and be prepared for sudden volatility.
Summary
- The US30 has been in a significant uptrend since May 1, 2024, forming higher highs and higher lows.
- The market failed to break below a classical head and shoulders pattern's neckline and instead moved higher with conviction.
- The long-term trend remains bullish, with the 50-period moving average above the 200-period moving average and the RSI indicating strong bullish momentum.
- A short-term retracement is possible, with potential targets at 39,430 and 39,000 levels if the market breaks below the current trading range.
- A break above 40,000 could trigger further buying, while a break below 39,000 and the 50-period moving average could signal a weakening of the uptrend.
- Traders should remain cautious and monitor fundamental drivers, as economic indicators, geopolitical events, and earnings reports can impact the market significantly.
