DJIA Coronavirus Stock Market Technical Trend Analysis
Stock-Markets / Stock Markets 2020 Mar 27, 2020 - 06:52 PM GMTBy: Nadeem_Walayat
Short-term Trend Analysis
The bubble that was the Dow's early year bull run has well and truly burst with the Dow literally crashing to a low of 24,700, and if it wasn't for the Coronavirus than the Dow would still have fallen to trade down to a low of about 27,500. Instead we have gone beyond that which technical analysis can determine, hence my continuing heavy focus on the Coronavirus trend which on the 27th of February concluded in expectations for the Dow to fairly quickly trade down to about 25,500 that it soon sliced through during it's multi day crash.
The short-term chart analysis -
1. The Dow made a double top as I suspected it could early February.
2. MACD is very oversold so implies limited downside but given thousand point plus moves per day is pretty much meaningless.
3. The trend is most definitely DOWN i.e. supports are not offering any support. So we have NOT seen the low yet!
Long-term Trend Analysis
The Dow has breached significant support at 27,500 hence triggering this bear market that initially targeted 25,500 (achieved). The coronavirus has ensured that it's going to be very tough to see Dow trade near 30k again in 2020.
TREND ANALYSIS - The Dow is in crash mode, slicing through support levels as investors panic sell whenever stocks bounce off their lows. Again to emphasis that the Dow has broken to the downside so rallies should be seen as being corrective at least for the time being.
RESISTANCE : Resistance is at the bear market trigger of 27,500.
SUPPORT : Is at the first target for this bear market of 25,500. Though given how easily it broke last time then it's not going to act as much of a support next time either. Then we have 24,600 which did manage to halt the sell off, and below that 23,300 and then 21,700.
TRENDLINES - A rising trend line off the recent low offers WEAK support at 25,000. Though I doubt it will hold any selling.
The overall trend picture is bearish i.e. we are likely to see new lows for this bear market. Anywhere from 22k to 24k.
MACD - MACD is extremely oversold. Which implies downside is limited. However we are literally in uncharted territory.
This this analysis was first been made available to Patrons who support my work. Coronavirus Dow Stocks Bear Market - March and April 2020 Trend Forecast
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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
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