- US30 trapped within range
- Index could see increased volatility
- RSI signals negative divergence
- Potential breakout on horizon
- Key level of interest at 38792
The US30 which tracks the benchmark Dow Jones Industrial Average remains trapped within a 520 pip range on the daily charts.
At the time of writing, it is about 250 pips away from reaching a new all-time high, repeating last Friday’s feat.
With Disney scheduled to report its earnings after US markets close, this could translate to increased volatility for the index. Investors will direct their attention towards the company’s earnings guidance for clarity on its future business outlook. Should earnings beat forecasts, this could provide support for the US30.
Beyond earnings, investors will also have their sights on the CPI revisions scheduled for Friday which has the potential to impact the index.
Technically speaking, the US30 has seen narrowing price ranges on the monthly charts since making the monster move back in November. It has also seen some significant movements over the past few months.
November: Over 3000 pips
December: Almost 2000 pips
January: Nearly 1500 pips
On the daily time frame, US30 is confronted with a negative divergence, with the RSI failing to make a new high in lockstep with the February 2nd all-time-high.
The index bulls(those looking to see the index go higher), will be looking for a strong close above the ranges resistance at 38681 to reach new all0-time highs above 38792.1.
On the other hand, US30 bears (those looking to profit from a decline in the index may have the following levels in their sights.
381460: The sideways channel support
38071.1: The 21-day Exponential Moving Average (EMA)
37800: A significant price level
37305.2: The 50-Day Exponential Moving Average