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Dow Jones Technical Analysis: The Index is Falling


Investors will closely watch January retail sales data later on Wednesday, for hints about consumer spending amid fears of an economic slowdown.

The Dow Jones Industrial Average declined in its recent trading on the intraday levels, breaking a series of gains that lasted for two sessions, recording losses of -0.46%. It lost about -156.66 points, to settle at the end of trading at the level of 34,089.28, after its rise during Monday’s trading by 1.11. %.



Recent trading has been volatile after the Labor Department said its consumer price index for January increased by 0.5% to a reading of 6.4%. This is the lowest level since October of 2021, and down from 6.5% in December. It went up from the 6.2% expected by analysts.

The so-called core inflation rate, which excludes the most volatile food and energy prices, rose 0.4% for the second month in a row, just above Wall Street’s forecast of a 0.3% increase.

Investors will closely watch January retail sales data later on Wednesday, for hints about consumer spending amid fears of an economic slowdown.

Meanwhile, Fed official John Williams noted at the New York area meeting that progress in inflation remains above the 2% target. The Fed will need to keep raising interest rates to curb inflation because its job is not done yet. He also noted that the economy is likely to entail a period of weak growth and some deterioration in labor market conditions.

Dow Jones Technical Analysis

Technically, the index’s recent decline came as a result of the stability of the pivotal and stubborn 34,281.36 resistance level, the resistance that we had referred to in our previous reports.

The index continued its narrow sideways movements to gain the necessary positive momentum to breach that resistance, considering its trading along a corrective and bullish sub-trend line in the long term. The short term, as shown in the attached chart for a (daily) period, with continued positive pressure for its trading above its simple moving average for the previous 50-day period, in addition to that, we notice the return of positive signals with the relative strength indicators.

Therefore, our expectations suggest that the index will rise during its upcoming trading, but with an important condition. This is its first penetration of the 34,281.36 resistance level, to then target the first resistance level at 35,361.36.

Dow Jones

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