DJIA (US30) Overview and Analysis

The DJAI is an expression of the overall value of thirty publicly-owned companies trading on the New York Stock Exchange and the NASDAQ. Since the Index is a price-weighted average of thirty companies this is used to gauge the overall performance of those companies. Since the price of the companies’ stocks influences its effect on the index the DJIA uses a “Dow Divisor” to properly reflect that.

Dow Jones Industrial Average Index Analysis

The DJIA is full of high volatility due to its limited amount of companies traded. This being said the DJIA has had two major shows of sideways consolidation. Beginning in May of 2013 the index showed its first attempt at resistance level 15397. This was followed by slight sideways consolidation until it broke this resistance in October of 2013. Leading into its first retest of resistance level 15397 in January of 2014. In May of 2015 we saw the limits of this sideways consolidation at resistance level 18300. 

These two values give us the basis for where the index would move between. Shortly after finding the high of this sideways consolidation there were three attempts to break below resistance level 15397 in August of 2015, January of 2016 and February of 2016. The index finally able to break above resistance level 18300 from July to September of 2016 showing it is capable of finding higher highs. In the beginning of November of 2016 we see the push to break the resistance level of 18300 to find higher highs. 

Shown in Diagram A (above) constant upward trend from November of 2016 to November of 2017 there is a crucial Point of sideways consolidation between July and September of 2017 that would lead into a retest of Resistance level 21785.90 in December of 2017. Heading into our current sideways consolidation resistance range of 23330.57 to 26829.85. Shown in Diagram B (below).

With the first high of the range being reached in January of 2018 it was followed by a volatile rush to retest the lower resistance level of 23330.57. Unable to reach this level the index was in a slight sideways consolidation until it tested this level in April of 2018. The volatility did not stop there and with an upward trend the index found its highest high at 26829.85 in October of 2018. With volatility remaining high the index showed slight sideways consolidation after reaching this highest high to only retest and break below our range and test resistance level 21785.90 in December of 2018. This was a previous point of resistance that held value. The inability to stay and break below resistance level 21785.90 the index was in route to attempt a retest of the highest high in the range in April of 2019. Shown in Diagram C.

Leading into current Index projections the index is attempting to retest and maintain above the previous highest high. If the index is unable to sustain above this value it will move to retest resistance at 25400.16. If the index is able to maintain above this value we will see another retest of the highest high. If the index is unable to maintain above 25400.16 there will be a retest of resistance level 24366.98. Shown in Diagram D.

*Charts are created with TradingView, our partner in charting.
Written by Nenad Jordanoski, Futures Trader and Technical Analyst.
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