the Dow Jones Index (US 30) is building a bull flag continuation chart pattern within a larger uptrend. A bullish breakout should confirm a push higher.
Let’s review the price and wave patterns plus review the main targets and what-if scenarios.
Price Charts and Technical Analysis
The US 30 chart needs a break above the resistance trend lines (orange) to confirm a continuation of the uptrend (green arrows):
- The bullish breakout could confirm a wave 3 (light blue) pattern.
- The larger wave analysis is indicating a strong uptrend with a potential wave 3 (purple) of wave 3 (red).
- Recently price completed an ABC (light blue) within wave 4 (orange) at the 38.2% Fibonacci level and 144 ema close. The -27.2% Fibonacci target of that price swing is located at 34,000.
- But a wave 3 (light blue) could go as far as 34,600 or even 35,000 before losing momentum, if this is a wave 3.
- Any bearish breakout (orange dotted arrow) would invalidate this immediate bullish outlook. Although the long-term trend is still up and therefore any retracement could simply find support at the 144 ema close (blue dotted arrow).
On the 1 hour chart, price action seems to be building a sideways correction after showing strong bullish impulse (wave 3 green):
- The sideways range is probably a wave 4 (green), which respects the 38.2% Fibonacci level.
- A bullish breakout could indicate a push higher. Perhaps as part of the wave 5 (green).
- A pullback to the 50% Fibonacci level could still be a bouncing spot.
- Only a deeper break places this wave outlook in danger. But the uptrend still remains intact even if price action retraces, just with a different wave scenario.
The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter.