US30 Uptrend Resumes after Bullish Breakout and Aims at $35k

The Dow Jones Index (US30) is back in the uptrend after a lengthy sideways correction.

As mentioned in our previous analysis, the correction turned out to be a wave 4pattern (green) which respected the shallow Fibonacci levels. Let’s analyse what to expect next.

Price Charts and Technical Analysis

The US30 daily chart made a bearish ABC (brown) sideways pullback towards the 38.2% Fibonacci retracement level:

1. The pullback completed a wave 4 (green) pattern. The strong bullish push upwards before the correction is a wave 3 (green):
2. A strong uptrend was visible with all the moving averages aligned (21 emas above the 144 ema which is above the 233 and 610 ema).
3. The bullish breakout above the resistance (dotted orange) lines indicates the uptrend continuation in wave 5 (green).
4. The bullish uptrend seems far from over if the current wave 3 (blue) of wave 3 (orange) of waves 3 of higher degrees is correct.
5. The next immediate target is the $35,000 round level.
6. A deeper pullback could indicate a warning sign (orange pause button) or invalidate the uptrend (red stop button).

On the 4 hour chart, price action is showing bullish impulsiveness again above the 21 ema zone:

1. The shallow pullback is typical for a wave 4 (gold).
2. The current bullish swing is probably a wave 5 (gold) of wave 3 (brown).
3. After the wave 5 (gold) finishes, there should be one more pullback in wave 4 (brown).
4. The previous wave 4 (gold) should now act as a support zone (green box).
5. A break below the support trend line (green) places the uptrend on hold (yellow button). A deep breakout invalidates it (red button).

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

For a look at all of today’s economic events, check out our economic calendar.