Technical analyst Chris Kimble examines the Dow Jones Industrial Average (DJIA) and finds reason to believe a big bounce will happen at the 21K level.
Over the past couple of months, the Dow Jones Index could be forming a descending triangle pattern, which two-thirds of the time leads to lower prices. The declines of late have the Dow testing support of this pattern, where a “short-term rally is due!”
If it is forming a descending triangle pattern, a short-term bounce could start at any time!.
The declines of late have the Dow testing support and support is support until broken. This support line could be the bottom of a bearish descending triangle pattern.
If this read is correct and the Dow breaks support line (2), the measured move suggests the Dow could reach the 21,500 zone.
Bulls want to see the Dow rally and break falling resistance to negate this potential pattern! Friends, the next couple of weeks should be interesting.
The SPDR Dow Jones Industrial Average ETF (DIA) closed at $235.13 on Friday, down $4.23 (-1.77%). Year-to-date, DIA has declined -4.95%, versus a -3.30% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Kimble Charting Solutions.