Tue, Jun 22, 2021 @ 08:06 GMT
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DOW targeting 26537 support after gap down

DOW gapped lower today and hit as low as 26579.14 so far. The decline then slowed as seen in 10-min chart. But that shouldn’t be taken as indication of bottoming yet. A break above today’s high (the lower end of the gap) at 27102.14 is needed to be the first sign of stabilization. Meanwhile, break of 27370.16 support turned resistance is needed to indicate short term bottoming. Otherwise, further fall should be seen to 26537.01 next.

As we noted before, current fall is, for now, seen as the third leg of the consolidation pattern from 29199.35. Break of 26537.01 might be seen as completing a double top reversal pattern. But we believe the key support lies in cluster at 24971.03, which is close to 25000 psychological level, and more importantly 38.2% retracement of 18213.65 to 29199.35 at 25002.81.

This could be the 25000 cluster could be the level to test as reaction to US election results. As long as it holds, rise from 18213.65 should be still in position to resume, probably rather quickly. But sustained break will open up the way for near term bearish reversal.

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