Trading Signal for DOW JONES, #INDU, for October 05 - 06, 2021: Key level 34,000 (SMA 21- 3/8)

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In the European session, the Dow Jones Industrial Index 30 (#INDU) is trading below the SMA of 21 and below the EMA of 200. The bias is bearish and the price could continue falling below 34,000.

On October 1, the Dow Jones reached the bottom of the main downtrend channel at the zone of 33,381. From this point, it has been rebounding. It rose over 900 pips in a single day and was stopped by the resistance of 4/8 murray.

The bullish momentum could not create a consolidation above 34,3750 because the murray 4/8 line is located at this level acting as a very strong barrier for the Dow Jones. A bullish move above the SMA of 21 will be a good point to buy.

A consolidation and break above 34,600 will confirm that the bulls would be preparing for a new bullish sequence that may push the price up to the 35,500 level.

On the contrary, a consolidation below 2/8 of murray located at 33,593 will cancel the technical bounce and will signal the beginning of the downtrend. Therefore, we must watch both levels. The key level is 34,000. Above it, there will be a bullish signal and below it will be bearish.

The eagle indicator is showing a signal of range-bound market. On September 27 and on October 1, the indicator touched the extremely overbought level around 95. Now the moving average of the eagle indicator is below this level that supports the market optimism and could revive the bullish movement.

Our strategy is to buy above 34,000 (3/8) with targets at the 200 EMA around 34,602. Alternatively, the index remains below the 21 SMA or the current level, we should sell around 33,975 with a target of 33,593 (2/8).

Support and Resistance Levels for October 05 - 06, 2021

Resistance (3) 34,561

Resistance (2) 34,172

Resistance (1) 33,948

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Support (1) 33,607

Support (2) 33,413

Support (3) 33,336

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Trading tip for DOW JONES for October 05 - 06, 2021

Buy above 34,007 (SMA 21) with take profit at 34,375 and 34,602 (EMA 200), stop loss below 33,930.

The material has been provided by InstaForex Company - www.instaforex.com

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