Kicking this morning’s report off with a look at the weekly chart, we can see the DOW remains in a robust position, trading above the 2017 yearly opening level at 19769. Looking down to the daily picture, however, our desk has noted that since mid-Dec 2016 equities have been trading within a phase of consolidation between daily resistance at 19964 and daily support at 19747.
Having seen yesterday’s daily candle react firmly from the top edge of the current daily range, this forced the H4 candles to connect with H4 demand at 19831-19873. Would our team consider this demand base a suitable area in which to look for buying opportunities today? Probably not. The reason, other than the recent reaction from the top limit of the daily range (see above), is simply due to how close January’s opening level is located. It may act as a magnet to price!
Our suggestions: We would not advise trading from the current H4 demand for reasons stated above. To our way of seeing things the odds are stacked against you. Of particular interest on this chart, nonetheless, is January’s opening level, which sits just above daily support at 19747. In our opinion, this is an area worthy of attention and could be somewhere traders may want to consider buying from should price touch base with this area today.
Data points to consider: There are no scheduled high-impacting news events that would likely cause strong moves in this market today.
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Levels to watch/live orders:
Buys: 19747/19769 ([lower-timeframe confirmation required prior to pulling the trigger in order to avoid the possibility of a fakeout given how small the buy zone is – see the top of the report for ideas on how to use this] stop loss: dependent on where one confirms the area).
Sells: Flat (stop loss: N/A).