Technical outlook:
Since the COVID-19 pandemic started spreading aggressively in January 2020, most World Indices has given in up to 40% from their respective highs. The US Stock indices Dow Jones, SPX500 and NASDAQ has been declining since mid February 2020. The above chart shows Dow Jones decline since 29600 highs from February 13, 2020 on wards. The indice has made lows around the 18200 levels on March 23, 2020 before producing the counter trend rally that was much awaited. It is too early to consider that the recent rally could exceed any further or push towards new highs. Rather the rally should be taken as an opportunity to initiate fresh short positions as most indices prepare to drop towards fresh lows. Also note that Dow Jones is facing resistance around the fibonacci 50% retracement of recent drop between 27,000 and 18,200 respectively. Furthermore, the declining resistance trend line resistance is also seen to be passing nearby (22,700 levels). Higher probability remains towards the downside from current levels and push below 18000 respectively. Immediate price resistance is seen towards 27,000 levels while interim support is seen towards the 18,200.
Trading plan:
Remain short @ 22,300/600, Stop @ 24,800, target below 18,000.
Good luck!
