Dow continues to head north after Tuesday’s massive 11.5% advance, driven by fresh optimism on Fed stimulus package
The Dow Jones extends gains on Wednesday, following previous day’s massive 11.5% rally, riding on fresh optimism on Fed $2 trillion aid package that is to be approved by US congress.
Restored confidence after Fed’s latest measure, sidelined persisting strong negative mood in the markets on devastating negative impact of corona virus pandemic and prompted traders back into riskier assets.
Tuesday’s move left long bullish daily candle and formed Doji reversal pattern on daily chart, with lift above psychological 20000 barrier and daily close above sideways-turned 10DMA (20147) adding to positive signals.
Fresh extension today broke above initial Fibo barrier at 20758 (23.6% of 29545/18044 fall), opening way towards pivotal barriers at 22365 (top of thick 4-hr cloud); 22437 (Fibo 38.2%) and 22580 (falling 20DMA).
Break here would generate stronger reversal signal and expose targets at 23795 (50% retracement of 29545/18044) and 24467 (weekly cloud base).
Broken 10DMA marks solid support which needs to hold and maintain fresh bullish bias.
Res: 21238; 22365; 22437; 22580
Sup: 20686; 20403; 20281; 20000