Technical Support Keeps Dow Jones Industrial Average Afloat

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March 28, 2017 8:09am INDEXDJX:.DJI NYSE:DIA

choppy-waters

Technical analyst Dave Chojnacki of Street One Financial reviews Monday’s wild stock action, which saw a massive gap down open met by an impressive rally as the day progressed, and updates the rapidly-changing technical levels for investors and traders to focus on as the first quarter draws to a close.


Equities gapped lower at the open, on Monday, still hungover from Friday’s pulling of the Healthcare Bill vote. The major indices tested some key technical levels early in the session and quickly reversed to the upside.

The averages moved slowly higher through the day and ended mixed on the day. The NDX was the only major index finishing positive in the session, while the Healthcare sector was one of the few positive sectors on the day.

By the final bell, the indices finished mixed and little changed. At the close, the DJIA was off 45.7 points, the SPX inched down 2.3 points, and the NDX added 10.2 points. Breadth was slightly positive, on below average volume. ROC(10)’s were mixed with the NDX the only index rising. All three remain in negative territory.

RSI’s fell for the DJIA and SPX and remained in the low 40’s. The NDX rose and finished at 56.7. All three major averages remain with their MACD below signal. The ARMS index ended the day at 1.06, a nearly neutral reading.

After yesterday morning’s big drop to the downside, the averages managed to look decent by the final bell. Some key technical levels were tested. The NDX broke the Bollinger Band lower level of 5325 in the session, but managed to close above it. It also closed just one point below its 20D-SMA of 5375.

The DJIA traded below its lower Bollinger Band of 20558, and its 50D-SMA of 20462. It found support near its 50D and closed above, however, it remained below the lower Bollinger Band. The SPX also traded below its 50D-SMA (2331), but found support and closed above. It remains 26 points below its 20D-SMA of 2367, however.

GLD (Gold) continued its rally, ending at 119.53. The VIX ended at 12.50, down 3.5%.

Near term support for the NDX is at 5350 and 5325. Near term resistance is at 5375 and 5400. Near term support for the SPX is at 2331, 2325 and 2312. Near term resistance is at 2350 and 2367.

Europe is mixed in early trade, while U.S. Futures are mixed and little changed in the premarket. We have two major economic reports on tap today, namely, the S&P Case-Shiller Home Price Index at 9:00am, and the Consumer Confidence numbers at 10:00am.

The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) fell $0.23 (-0.11%) in premarket trading Tuesday. Year-to-date, DIA has gained 3.91%, versus a 4.51% rise in the benchmark S&P 500 index during the same period.

DIA currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #5 of 74 ETFs in the Large Cap Value ETFs category.


Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, David Chojnacki, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Dave Chojnacki

Dave Chojnacki is the Chief Market Technician at Street One Financial. He provides technical support for the Street One team and also develops individual analysis for Clients as requested.

Dave is a major contributor to the ‘ETF Daily’, a morning newsletter providing clients a daily look at market technicals of the major indices and selected ETF’s. Market trends, support and resistance levels are provided in the daily letter. The Technical portion of the daily can also be found on Seeking Alpha. Mr. Chojnacki has been quoted in a number of industry publications including the Reuters, ETF Trends, Minyanville, Yahoo Financial and Investors.Com.

In addition, Dave assists with desk trading when necessary. He possesses a Series 7 and 63.

Prior to joining Street One, Dave designed and developed I/T Systems for the Insurance and Financial Industries.


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