Stimulus bets as well as positive vaccine news are driving the Dow Jones Industrial Average to new record highs this Monday.
A report from COVAXX, a subsidiary of United Biomedicals, indicates that their coronavirus vaccine candidate showed 100% efficacy at generating neutralizing antibodies in test subjects. This news boosted sentiment that was already revved up by the US Treasury Secretary’s comments about the US returning to full employment if the $1.9trillion stimulus was rolled out.
The Dow Jones Industrial Average is rolling on to a 6th straight session of gains, marking the 2nd of such streaks in the last 6 months as it inches towards the 32000 psychological resistance level.
Technical Levels to Watch
The Dow Jones Industrial Average touched off a new high at 31372, but has retreated slightly as it contends with the resistance posed by the previous high. As it is, the Dow has now formed a third top on the daily chart. The price needs to break above the 32000 psychological resistance for the recovery from last year’s COVID-related lows to continue. This move could blow the pathway towards 32505 wide open, with the 127.2% Fibonacci extension at 34216 also lining up as a potential upside target.
On the flip side, a run towards the downside sets up the potential for a triple top pattern, which will only be confirmed if the 30585 support line (acting as the neckline) is broken. This allows for a potential measured move that targets 29842. However, this move has to take out 30358 and 30101 along the way for the measured move to be actualized.
Dow Jones Daily Chart