Courtesy of John Nyaradi.
At Noon EST, the Dow hovers at 13005.73. Will the bulls keep up their charge and close above 13,000?
As of Noon Eastern time, the Dow Jones Industrial Average holds steady at 13005.73, just 5 points above the tough 13,000 level. The DJIA initially had a tough morning as the index hit a low of 12952.82 right before 10 Am Eastern, however investors rallied hard and the DJIA broke 13,000 just after 10 AM Eastern.
With less than four hours left in today’s trading session, the DJIA has leveled off just above the 13,000 mark and appears to be moving sideways; will the Dow be able to sustain itself above 13,000?
Chart courtesy of stockcharts.com
The SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) has also performed well today, as NYSEARCA:DIA has risen .16% so far in hopes of closing in the green. The DJIA and its NYSEARCA:DIA counterpart have been on a steady incline since the beginning of the year but have faced tough resistance at the 13,000 level for the last several days.
One can see in the chart above of DJIA that the 50 day moving average (blue line) crossed the 200 day moving average (red line) at the beginning of the year as well, indicating a “Golden Cross” or buy signal. However, one can also see that the MACD indicator (blue bars) at the bottom of the chart have been just under the zero mark, perhaps indicating a slow in momentum, although the MACD is slowly nearing zero and might tip over the edge into positive territory. The RSI on the other hand, currently rests at 67.06, which suggests that the DJIA is nearing overbought levels.
By looking at the chart below of NYSEARCA:DIA, the MACD is also nearing zero and is about to tip over into the positive realm, however the RSI is less than half a point off of 70 and is nearly overbought, so it is clear that DJIA and NYSEARCA:DIA are both facing significant resistance at current levels:
Chart courtesy of Stockcharts.com
Today’s release of the Richmond Fed report might also help the DJIA close above 13,000, as the report indicated that manufacturing has improved in the Richmond area. Since the DJIA is the bellwether of US industrial activity, any positive manufacturing reports usually help the DJIA rise. Just one positive economic report might not be enough however to push the bulls to a sustained level above the 13,000 mark.
Bottom Line: The DJIA and NYSEARCA:DIA continue to face significant resistance as indicated by the near zero MACD and near 70 “almost overbought” RSI indicator. Although the DJIA broke 13,000 earlier today, the index and its ETF are on the incline right now, so we will see if the bulls can maintain their charge and close higher.
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