Dow Jones Outlook: March to 31300 Still Possible If 30585 Remains Intact

Summary:

The Dow Jones Industrial Average is trading lower, but the march towards 31300 remains feasible if the 30358 support holds.

The Dow Jones Industrial Average opened slightly higher, but quickly lost the bullish momentum and sank early towards 30634.

The 0.25% drop was short-lived as price action found support from the surprise gain in the January ISM Services PMI number. The ISM Services PMI rose to 58.7, beating the market expectation of 56.7, and also bettered the previous number of 57.2. However, bulls have not been able to find the momentum to seize the initiative.

Not even the news of President Joe Biden’s meeting with the Democratic Caucus to work out details of the stimulus bill could steer market sentiment to the upside. The Dow Jones Index continues to trade lower on the day.

Technical Levels to Watch

The V-Shaped recovery on the Dow Jones index appears to have stalled, as yesterday’s closing penetration above the 30585 resistance has been followed by a bearish candle. However, hopes are not lost for a breakout of this level, as the bearish move has found support at the violated resistance. Bulls need to keep prices above this level to complete the breakout confirmation, which opens the door towards the all-time high at 31288.

If bears can force a lower close than the 30585 price mark, then the breakout is negated and we could see a pullback towards 30358. 30101 remains a viable downside target though, as long as bears keep the price below 30585. Steeper targets to the south require a breakdown of 29842 (29 January low) to achieve target potential for sellers.