During the period of significant trades in the past month on the New York Stock Exchange indices, Dow Jones index showed entirely different driving dynamics. The team of analysts and traders in conjunction with the marketing department of the company Trade-24 paying your attention to the technical analysis of the cost of the movement of the main US indices, as well as point out the factors that could lead to changes in the level.
Financial experts of our company noted four periods of the index level movements Dow Jones. The first time was active from 9 to 12 January. Overall it was held on the channel between 19875-19925 and often reached the top level to 19900-19925. An important movement stands on speeches of the future US President Trump regarding the further development of the US economy.
The second-period cost of goods determined the fall of the overall index value. It lasted from 14 to 23 January. Changes in due to variations in the index on the level of resistance, because in a few days lost in the degree of support up to 68 points of the benchmark. Trade-24 experts figured two features – low volatility in the market due to the preparations for the inauguration of the 45th President of the United States, as well as the likely trading signals, which implemented in the inaugural speech.
The third stage is the consolidation and the rise of the index indicators. It lasted from 24 January to 29 January. During this period, the Dow Jones index for the first time in history hit the mark of 20 000 points and was able to reach the historical record on trading on the New York Stock Exchange. The probable cause of the exponential leap became the overall growth of the shares of Blue Chips in the last three days of trading, as well as the pragmatic promises Trump team about new programs and influences the country’s economy.
The final stage from 30 January to 8 February correction began to broadband, with two imaginary downs to levels that marked the period from 9 to 13 January. The probable reason can be considered weak expectations for the US economic opportunities for the period from the end of the fourth quarter of 2016 to the middle of the 1st quarter of 2017. Also among the causes can be considered hawkish policy decisions of the Administration of the White House regarding migrants and amendments to regulate the banking sector.
Analysts of Trade-24 believe that before the end of February we should expect two possible scenarios. The first – the stabilisation of the Dow Jones index at the level of performance by the formula of correlation 19,950 +/- 140-150 points with a long range of time. In the second scenario, the movement will be different levels of resistance and support on the width of the channel between the levels of 19,840-20,100 with fluctuations in the short term.