The daily INDU chart confirms two recent head and shoulders breakouts. Above the neckline resistance at 34,588-34,712 hints at the next INDU rally to 36,953 (1/5/22 all-time high) and above this 37,995 (Nov 2022 h/s bottom breakout projection) and 40,764 (Jan 2022 h/s bottom breakout target). Two negative outside days (7/27/23 and 8/4/23) and failure to clear the next resistance at 35,492-35,824 (Aug 2021 and Feb/Apr 2022 highs) warn of near-term consolidation to the previous breakout levels at 34,589-34,712 and below this 34,267 (50-day ma), and 33,511-33,861 (200-day ma, 6/26/23 low, and Mar 2023 uptrend). Violation here warns of a deeper correction toward 32,5573-32,586.5 (Dec 2022 and May 2023 lows or left/right shoulders), and 31,430 (Mar 2023 reaction low).
RRG study shows mixed rotations as 14 INDU stocks reside within the Leading/ Improving Quadrants and 16 in the Weakening/Lagging Quadrants. CAT, JPM, V, and WMT are strong.
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