Review and dynamics
Trump is leading presidential election. Following high volatility at the Asian session, global financial markets have gradually calmed down, and US stock indices have regained half of the losses sustained earlier today.
After the record highs at the level of 18620, which the price reached this summer, today, the index DJIA has dropped to the level 17490 (Fibonacci 38.2% after the rise from the level of 15660 in February after the decline in the markets since the beginning of the year).
Today, volatility in the index DJIA has reached 970 points, or 5.5%, breaking the record of the past few months.
However, the pair DJIA has corrected in the early European session and is traded at the key support levels of 17920 (Fibonacci 23.6% and ЕМА200 on the daily chart) and 18040 (ЕМА144 on the daily chart).
Despite the strong current decline, on the daily chart the indicators OsMA and Stochastic give signals for long positions; on the hourly and 4-hour charts the indicators also give signals for long positions. It is likely that today and later this week financial markets will stabilize.
Movement of the indicators strongly depends on fundamental factors. Adherence of the US Fed to the monetary policy tightening is a factor, which triggers the decline in the US stock indices. Note also that American economy is strong at the moment, which is proved by the positive statistics, which also triggers “bullish” trend in the stock market.
In the case of breakdown and consolidation of the price below the level of 17290 the decline in price may continue. Consolidation below the level of 17490 (Fibonacci 38.2, ЕМА200 on the weekly chart) can enhance the decline.
As an alternative scenario the price will consolidation above the level of 18040, and continue to rise up to resistance levels of 18280 and 18375. Breakout of these levels may trigger further rise up to the annual highs at level of 18620.
As long as the index DJIA remains above the key support level of 17920, uptrend will continue. It is advisable to open long positions above the level of 18040.
Support levels: 17920, 17850, 17700, 17490, 17380 and 17150.
Resistance levels: 18280, 18375, 18435, 18450, 18500 and 18620.
Buy on the market. Stop-Loss: 17900. Take-Profit: 18040, 18280, 18375, 18435, 18450, 18500 and 18620.
Sell Stop: 17900. Stop-Loss: 18000. Take-Profit: 17850, 17700, 17490, 17380 and 17150.
Rebound from the level of 17490
Support levels of 17920 and 18040