The US 30 stock index is currently challenging June’s peak of 26,907 but the positive momentum in the MACD, which trends above its trigger line, signals that a new record high could be achievable as well in the next few sessions. Still, the RSI warns that the market is approaching overbought territory and hence downside corrections cannot be ruled out.
Jumping above the 26,907 resistance level, the bulls would aim to test the uncharted area between 27,000 and 27,500.
Otherwise, if the market weakens below the 26,424 support, the 40-day simple moving average (SMA) currently at 26,036 could next halt bearish action. Moving lower, the 23.6% Fibonacci retracement level of the upleg from 21,596 to 26,907 near 25,657 could provide a stronger base.
In the medium-term picture, a bull market could officially begin comfortably above 26,960, while a bearish outlook would resume under 24,607.
