Is the DJI 30 stock index readying a near 800-point drop?

September 16, 2021 22:18

In yesterday’s trading, the Dow Jones 30 stock market index sank 100 points before recovering to near unchanged levels by the end of the day. The weakness came despite a positive retail sales number.  

September tends to be a seasonally weak month for the US stock market and Dow Jones 30 index. Interestingly, the index is now testing a key horizontal resistance line which could determine the next move up or down.  

Source: Admirals MetaTrader 5DJI30Daily - Data range: from 3 May 2021 to 16 Sep 2021, performed on 16 Sep 2021 at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results. 

The daily chart of the DJI 30 shown above, highlights a key horizontal resistance level around 34,820. This was previous support during August and now it’s acting as a potential resistance zone.  

If sellers can maintain control here then the next level of support is around the 34,030 level which is 19/20 July swing low. This would represent a near-800 point drop so it’s one to watch.  

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Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.