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Dow Bounces after Repeated Downside Rejections; Plethora of Barriers Warns of Limited Correction

Dow Jones Dec future contract regained traction and bounced on Monday, with fresh advance after repeated downside rejections last week, fueled by acquisition news from IBM and better than expected US inflation data. Fresh recovery generates initial basing signal after larger bears repeatedly failed to close below cracked Fibo support at 24544 (61.8% of 23050/26962 upleg) and also showed strong rejection at weekly cloud top (24637).
This could open way for stronger recovery as overextended daily studies started to point north. Recovery cracked pivotal barrier at 24961 (Fibo 38.2% of 25844/24415) but was so far unable to break higher, keep intact strong resistances at 25121/25202 (converging 200/10SMA’s), violation of which would generate stronger bullish signal. On the other side, overall negative sentiment and daily techs maintain bearish bias and suggest limited recovery ahead of fresh attempts lower, while 200SMA caps.

Res: 24961; 25121; 25202; 25438
Sup: 24653; 24544; 24415; 23978

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Windsor Brokers Ltdhttp://www.windsorbrokers.com/
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