The Dow Jones 30 is within record of all-time high territory and speculators who are trying to sell against the trend with the belief it is overvalued may want to reconsider their skepticism. Yes, the US economy faces challenges ahead as it deals with coronavirus implications and how the government will continue to foster more stimulus for those in need, but these issues have not prevented the rise in values via major US stock exchanges on Wall Street.
Technically, it is hard to indicate resistance levels, except to acknowledge that certain numbers may present a greater psychological barrier to overcome as the Dow Jones 30 continues to march upwards. The 30400.00 level is now clearly in focus, but if market conditions remain fast today, a move towards the 30500.00 almost seems logical near term.
Speculators should be careful not to over-leverage themselves and bet the house that the one-way market conditions will always prevail. However, this doesn’t mean they should stand in front of the trend either. Using limit orders with take profit and stop loss ratios working makes good common sense.
Traders should also understand that US markets, including the Dow Jones 30, may see fast conditions today and tomorrow as investors position themselves ahead of the holidays. Speculators need to know that Wall Street enjoys few things more than a good Christmas rally on the Dow Jones so they can rest comfortably over the next week or two with the notion that all is positive. While that may sound farfetched, it should be remembered that behavioral sentiment is an important aspect of trading and the Dow Jones 30 is affected by market sentiment more than most assets.
Buying the Dow Jones 30 at these high levels may feel dangerous, but it might prove to be the right decision. Certainly, a trader can wait for slight pullbacks and try to look for support levels to be tested before they buy into the Dow Jones, but there is also a chance the market may escape the grasp of speculators who prove to be overly conservative. What appears expensive today may appear cheap tomorrow. Traders may want to consider pursuing the bullish trend while risk appetite continues to prove it is rather hungry.
Dow Jones 30 Short-Term Outlook:
- Current Resistance: 30380.00
- Current Support: 30275.00
- High Target: 30450.000
- Low Target: 30195.000
