Dow Jones Industrial Average (DJIA) Underperforms S&P 500 and Nasdaq 100 as Sideways Range Persists

• Dow Jones Industrial Average (DJIA) has underperformed the S&P 500 and Nasdaq 100 in the past two weeks.
• Last Friday’s initial bullish price actions of DJIA retreated at 34,630 key range resistance.
• Minor uptrend from the 10 July 2023 low of 33,595 has shown signs of exhaustion.

 

 

Last week’s advance halted at 7-month range resistance

 

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Fig 1:  US Wall St 30 medium-term trend as of 17 Jul 2023 (Source: TradingView, click to enlarge chart)

Since the 13 December 2022 high of 34,944, the US Wall St 30 Index (proxy of the Dow Jones Industrial Average futures) has continued to oscillate within a 7-month sideways range configuration.

The 3% rally from the 10 July 2023 minor low of 33,595 has been rejected at the 34,640 range resistance for the third time last Friday, 14 July, and confluences with a major descending trendline that capped previous up moves since the 29 March 2022 high.

 

 

Short-term momentum has flashed a bullish exhaustion signal

 

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Fig 2:  US Wall St 30 minor short-term trend as of 17 Jul 2023 (Source: TradingView, click to enlarge chart)

The hourly RSI oscillator has flashed a bearish divergence signal at its overbought region which suggests that it is likely the upside momentum of the minor short-term uptrend from the 10 July 2023 low of 33,595 has been exhausted which in turn increases the odds of a minor decline.

Watch the 34,630 key medium-term pivotal resistance to maintain the short-term bearish bias with near-term support coming in at 34,320. A break below it exposes the next supports at 34,000 and 33,840.

However, a clearance above 34,630 sees a potential bullish breakout from the 7-month range with the intermediate resistance coming in at 34,940 in the first step.