In the early hours of the American session, rhe Dow Jones 30 industrial index, #INDU, is trading above the SMA of 21 and above the key level of 8/8 of murray located at 34,375. In our previous reviews, we indicated this zone as a strong top. Given that on Friday the Dow Jones closed above this level, the index is likely to make a strong attempt to reach the psychological level of 35,000.
Last week ended well for Wall Street stocks, with the Dow Jones closing positive on Friday at 34,617, just shy of its recent all-time highs, on continued optimism about the US economic recovery.
The Dow Jones, #INDU, on the 4-hour chart is showing signs of exhaustion below the last candles which have been very small, and drawing a small bearish channel. The 21 SMA area is likely to offer good support for a technical bounce.
On the contrary, a consolidation below 34,470 could be the reason for a correction movement to the zone of the 200 EMA located at 34,159. At this level, the 4-hour uptrend channel converges and could give a good bullish moment to the Dow Jones in the short term.
Our recommendation is to buy at the 21 SMA, and sell below 34,470 and buy back at the 200 EMA around 34,150. The eagle indicator is showing a bullish signal.
Support and Resistance Levels for May 31, 2021
Resistance (3) 34,721
Resistance (2) 34,639
Resistance (1) 34,579
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Support (1) 34,436
Support (2) 34,354
Support (3) 34,247