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Technical Review of Dow Jones Industrial Average (INDU)

INDU has declined 7,299.38 or 19.75% from 1/5 to 6/17/22 placing the average within a bear market. A downtrend channel warns of further selling. Violation of 29,568-29,794 (6/17/22 low, Nov 2020 V-pattern breakout, 38.2% retracement from Mar 2020-Jan 2022 rally, and the bottom of the downtrend channel) warns of the next INDU selloff to 27,583 (50% retracement) and 25,372 (61.8% retracement).


Key initial resistance is 31,885-32,441.5 (6/28/22 high, Apr 2022 downtrend, 6/10/22 gap-down, 2/24/22 low, May 2022 breakdown, 50-day ma, and 38.2% retracement from 1/5-6/17/22 decline). A convincing breakout extends the oversold rally to 33,203-33,272 (6/1/22 high and 50% retracement) and 34,118-34,520 (5/4/22 high, 61.8% retracement, 200-day ma, and top of downtrend channel).


RRG study suggests a challenging market environment as more than half of INDU stocks reside in the Weakening and Lagging Quadrants. Leading INDU stocks include MRK, IBM, JNJ, MCD, HON, and VZ.


Source: Chart courtesy of StockCharts.com

Source: Chart courtesy of StockCharts.com

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