Dow Jones Forecast: Buyers facing a challenge at 32500-33000
- As major retail companies begin their earnings reports this week, the Dow Jones Industrial Average is up by 280 points on Tuesday.
- With the Dow Jones Industrial Average up 400 points in the past two weeks, the S&P 500 increased 2%.
- Early Wednesday, the direction of the June E-mini Dow Jones Industrial Average will depend on the trader’s reaction to 32588.
Dow Jones industrial average has risen 400 points in the past two weeks, while S&P 500 gained 2%. The Nasdaq Composite increased 2.8% from a down session on Monday in tech stocks. S&P 500 stocks have dropped six straight weeks, their longest losing streak in over a decade, while the Dow Jones Industrial Average has dropped seven consecutive weeks, its longest losing streak since 2001.
During Wednesday’s pre-market session, June E-mini Dow futures are slightly lower as investors hope to extend the rally on Monday. Stocks have been selling off recently, but the recent decline appears to have paused in the futures market.
The Dow gained 431 points, or 1.3%, during the previous cash market session. Furthermore, investors hope that the blue-chip average will end its seven-week losing streak.
The May E-mini Dow futures are trading 32530, down 51 or -0.16%. Dow Jones Industrial Average-tracking exchange-traded funds ended Tuesday’s session at $327.04, up to $4.26 or 1.32%.
Apple and Microsoft contributed to the strength of the E-mini Dow, which was lifted by gains in mega-cap growth stocks. Apple closed up 2.54%, while Microsoft gained 2.03%.
However, not all was rosy. Walmart’s quarterly earnings report significantly missed Wall Street’s expectations, resulting in its shares falling over 11%. Fuel prices have risen, inventory levels have increased, and management cited overstaffing among the reasons for increased costs.
Consumers are buying motor vehicles amid supply improvement amid an increase in restaurants in the U.S. economy. As a result, retail sales in the U.S. increased by 0.9% in April.
Dow Jones technical analysis
From the daily chart, it appears that the trend is down. In the event of a move through 31148, a resumption of the downtrend will be signaled, while a move through 34027 signals a trend shift from down to up.
There is a short-term range of 34027 to 31148. The market is presently challenging a retracement zone between 32500 and 33000.
This range stretches from 35413 to 31148. There is potential resistance in its retracement zone of 33281-33784.
Early Wednesday morning, the direction of the June E-mini Dow Jones Industrial Average will be determined by trader reaction to 32588.
An increase in the Dow Jones Industrial Average over 32588 will indicate buyers are present. You can expect a surge to 32927 if this creates enough upside momentum. When the level is reached, sellers may step in to make a profit. If the level is overtaken, it may prompt an acceleration towards 33281.
Sellers will emerge when the price moves below 32588 for a sustained period. The rally from 31148 to 32651 will need to be corrected by 50% if this move generates enough downside momentum. As a consequence, the closest target is 31899. However, if sellers take 32651, the price will rise.
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