Dow tries to build a base, but resistance looms ahead
DIA•The Dow rose 3.6% last week to 51,654, its strongest weekly gain since early August, but remained nearly 5% below its record close. The index is finding support near 51,403, with resistance clustered between 51,875 and 52,635.
1. Support and resistance
The Dow Jones Industrial Average has lagged the S&P 500 and Nasdaq, which reached record highs last week, and was still recovering from a four-month low. It closed at 51,654 on Friday after its strongest weekly gain since early August. The index remains nearly 5% below its record close and 5.6% below its all-time intraday high.
2. Levels to watch
The Dow is finding support near 51,403, the 38.2% Fibonacci retracement of its March-August advance. Resistance levels include the September 25 high at 51,875, the rising 100-day moving average near 52,140, and the September 22 high at 52,319; further resistance lies at 52,458 and near 52,635. A renewed close below 51,403 could bring support levels around 50,547, 50,513 and 50,355 into focus.
3. Market backdrop
US stock futures were little changed Monday as investors monitored oil prices and geopolitical developments ahead of bank earnings and inflation data that could influence the Federal Reserve’s rate outlook. The US bond market was closed for the Columbus Day holiday.
