Dow Jones Outlook: Dow Boosted by Strong BA Earnings But Lacks Momentum for Stronger Upside

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Dow bounced from the session low at 25012 in pre-market trade on Wednesday, boosted by stronger than expected Boeing Q3 earnings. The index was additionally boosted by upbeat report from Capital One and expectations for strong earnings report from LiqTech International, but faced headwinds from weaker than expected reports from AT&T and UPS, with focus turning on report from Ford, scheduled after close of the session. The Dow price spiked to new 3 1/2 month low at 24751 on Tuesday, but bears showed strong downside rejection, as subsequent bounce returned and closed above 200SMA (25142), which keeps the downside protected for two weeks. Tuesday’s action left Hammer candle which signals reversal, but the price so far lacked strength for any serious recovery action and stays capped by rising daily cloud. Break above initial barrier at 25390 (sideways-turning 10SMA) would generate initial bullish signal, with extension above 100SMA (25502) to provide relief, and close above 25844/25918 (17 Oct recovery high/daily cloud top) to signal reversal Momentum is reversing deeply in the negative territory and supports the notion, however, expectations for stronger recovery are limited as overall picture is bearish. Negative outlook could be expected while daily cloud base caps, while eventual close below 200SMA would generate bearish signal for attack at another strong support – weekly cloud top (24713).

Res: 25390; 25502; 25844; 25918
Sup: 25142; 25012; 24751; 24713

 
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