Dow Jones outlook: Dow remains firm as traders focus on Black Friday

Dow Jones

The Dow Jones is trading just under new multi-month high and moving within a narrow range for the second straight day, in a holiday-thinned market.

Traders were mainly on hold for Thanksgiving, but closely watch major retailers on Black Friday, amid the fact that inflation remains high and threats of possible recession next year.

The Dow keeps overall strong bullish stance and extends October’s massive gains, sparked by better than expected earnings season and additionally boosted by signals that the Fed would ease its aggressive stance in tightening its monetary policy.

Monthly bullish engulfing in October strongly underpinned the action this month, keeping the index on track for the second straight monthly rally, as acceleration from 28638 (Oct 3 correction low) so far retraced over 61.8% of 36830/28638 pullback.

Firm bullish structure is also seen on weekly chart, as Dow resumed steep advance after pausing last week, with weekly close above former top at 34244 (Aug 16) would add to bullish signals.

Daily studies are overbought and bullish momentum is fading that may set scope for some corrective action, which should be limited and expected to provide better buying opportunities.

Rising 10DMA (33876) marks initial support which should ideally contain, with deeper pullback to stall on approach to 33340 33188 (rising 20DMA/Nov 17 trough) and keep bulls intact.

Res: 34757; 34897; 35277; 35409.
Sup: 34127; 33876; 33753; 33341.