Hi Traders! Dow Jones technical analysis and short term forecast post is here. We do our analysis on the MetaTrader4 platform (MT4), some very interesting, useful tips and hacks about the MT4 platform could be found here. If you would like to learn more about the way we trade and the technical analysis we use then check out the Home Trader Club Spoiler alert – free memberships are available! In Dow Jones we are going to perform the top – down analysis in order to find possible trading opportunities. Let’s start our analysis now from the highest timeframe which will be the H4 chart here.
Dow Jones H4(4 Hours) Chart Analysis – Heikin Ashi Candles, Bearish Convergence, ADX Indicator
On the H4 chart, currently, we have a strong bearish momentum and based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment. In addition to this, we have a bearish divergence that has formed between the first high that has formed at 39951.60 and the second high that has formed at 40056.34 based on the MACD indicator. The price then moved lower and broke below the last low at 39323.55 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider this as evidence of bearish pressure. As per the book scenario after a bearish convergence we may expect corrections and then further continuation lower. Currently it looks like a correction is happening. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as another evidence of bearish pressure. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidences supporting this short term bearish view.
Dow Jones H1(1 Hour) Chart Analysis – Strong Bearish Momentum, Heikin Ashi Candles, ADX Indicator
On the H1 chart, we have a strong bearish momentum and based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies here as well in downward-moving market conditions so it basically reflects a bearish environment. In addition to this, the ADX indicator gave a bearish signal here as well at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads a value over 25 which we may consider as yet another evidence of bearish pressure. Also, there are no signs opposing this short term bearish view at the moment. So everything looks good here for the bears and until this strong resistance zone (marked in red) shown in the image below holds my short term view remains bearish here and I expect the price to move lower further after pullbacks.
Technical Analysis & Forecast Summary
Dow Jones H4(4 Hours) Chart Analysis
- Heikin Ashi Candles, Bearish Convergence, ADX Indicator
Dow Jones H1(1 Hour) Chart Analysis
- Strong Bearish Momentum, Heikin Ashi Candles, ADX Indicator
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short-term sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
