The Dow Jones Industrial Average (DJIA) is one of the most widely recognized stock market indices in the world. It tracks the performance of 30 large-cap American companies and is often seen as a barometer of the overall health of the US economy.
In this Dow Jones futures video, i duscuss the technical analysis of the Dow Jones and share my perspective on the potential for a bounce in the market. I note that there has been a lot of negative (and meaningful for many companies!) news regarding banks and other factors that could impact the market. However, I believe that there is a contrarian long opportunity for traders who are willing to take a limited risk.
I present the bull channel that was broken previously, and subsequently retested. There is another retest now, and while there is a possibility of a piercing the channel on this retest (price entering the channel), I believe that it is worthwhile to target a bounce is in the very near future.
I share that I will be looking look for a long opportunity in the area where the channel was broken out of, and note that the reward versus risk is favorable. I do caution traders to do their own analysis and trade at their own risk, but believe that there is a good reason to take a bet on the daily time frame.
This analysis and its trade “lookout” may be right or wrong BUT IN ANY CASE, it highlights the importance of technical analysis in situations like this, where there may be a lot of over-excitement or panic based on news events. They suggest that traders who follow technical analysis may be able to identify high risk-reward key junctions where algorithms and traders may be looking to buy or sell, and take advantage of those opportunities.
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