The primary bear trend from Jan 2022 decline continues as INDU suffers another market setback. A bearish island reversal on 10/07/22 and a 4-month head and shoulders top breakdown below the neckline at 29,653-30,144 (6/17/22 low) confirms a distribution top and warns of a 4,628.07-points decline or a downside target at 25,025, intermediate-term. Next pivotal support is 27,333-27,583 (bottom of Jan 2022 downtrend channel and the 50% retracement from 2020-2022 rally), 26,144-26,537 (Sept/Oct 2020 lows), and 25,025-25,372 (61.8% retracement and the head/shoulders top breakdown target).
Initial resistance is 29,685-29,859 (10/7/22 island reversal gap-down) and above this 30,454.5-30,663 (10/5/22 high and Aug 2022 downtrend), 31,021-31,110 (9/21/22 negative outside day high), 31,700-32,504 (9/13/22 gap-down, 6/28 and 9/12/22 highs, and the 50-day ma). Intermediate-term resistance remains at 33,066-33,642 (200-day ma, 6/1/22 high, left shoulder, and top of the Jan 2022 downtrend channel), and 34,281 (8/16/22 high and the head).
RRG study shows 13 INDU stocks in the Leading/Improving quadrants, including DIS, GIS, AAPL, HD, WMT, BA, HON, CVX, CAT, AXP, CSCO, JPM, and TRV. The 17 INDU stocks residing in the Lagging/Weakening quadrants include UNH, MCD, MRK, IBM, AMGN, KO, INTC, DOW, VZ, WBA, NKE, MMM, CRM, JNJ, PG, V, and MSFT.
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