DJIA Status Update- October 4, 2009

Unlike my other DJIA Forecasts on the Technical Analysis Base website, this is not an extensive analysis of the DJIA.

Major Indicators:

• Resistance evident at ~10K level (Figure 1).
• Log Charts (Figures 1 & 4): DJIA is touching the up trending support line. If DJIA bounces off the up trending support line, then our intermediate-term price target will be near the upper channel line (Figure 1).
• Arithmetic Charts (Figures 2 & 3): DJIA is fast approaching the up trending support line . Upon downside penetration of this support line, you may expect DJIA to retrace to the support levels identified in Figure 1 and/or the Fibonacci confluence levels in Figures 2, 3 and 4.

Near-Term DJIA Forecast:

• Log Charts: A bounce off of the supporting up trend line.
• Arithmetic Charts: Expect DJIA to approach the supporting up trend line- Green oval identified in Figure 3.
  

Bearish Signals:

• DJIA's inability to reach the upper channel line (Figure 1).
• Downside crossover of SMA-50 (Figure 1).
• Negative MACD Divergence (Figure 3).
• RSI crossing below the signal line (Figure 3).

Bullish Signals:

• SMA-50 potentially acting as a support level.
• Since DJIA is at the lower Bollinger Band, we can expect DJIA to rally toward the upper band (Figure 1).
• Supporting up trend line (Figure 1).

Figure 1 (Log Scale)

Figure 2 (Arithmetic Scale).

Figure 3 (Arithmetic Scale).

Figure 4 (Log Scale).

Don't forget to visit Technical Analysis Base website at http://www.technicalanalysisbase.com and Sanjeet Parab Blog at http://sanjeetparab.blogspot.com

-Sanjeet Parab

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