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Dow Jones Technical Analysis: Receives Positive Support – 28 April 2022

Our expectations remain neutral, waiting for the index’s behavior towards the support level 33,271.90.

The Dow Jones Industrial Average rose slightly during its recent trading at the intraday levels, to achieve slight gains in its last sessions, by 0.19%. It gained about 61.75 points, to settle at the end of trading at the level of 33,301.94, after declining in Tuesday’s trading by -2.38%.

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Only 11 of the index’s 30 components rose, topped by Visa Inc. in percentage terms. Cl A, which recorded a gain of 6.47%, followed by Microsoft Corp. by 4.81%, and Salesforce Inc. by 2.70%.

Materials, energy, and technology halls led the market gains on Wednesday, while telecom services posted the biggest drop among sectors, while the 10-year US Treasury yield rose 6.6 basis points to 2.84%.

Russia has reportedly halted natural gas supplies to Poland and Bulgaria because it failed to respond to Russian President Vladimir Putin’s demand to pay for energy imports in rubles. European Commission President Ursula von der Leyen reportedly said the move amounted to “another Kremlin provocation” and called on Moscow to use gas to “blackmail” the bloc.

The US international trade deficit in goods widened to $125.32 billion in March from $106.35 billion in February, according to data from the US Census Bureau, a much larger gap than the $105 billion deficit projected in a survey compiled by Bloomberg. Exports rose 7.2% in March, while imports rose 11.5%.

US pending home sales fell 1.2% in March, more than the 1% drop expected in a Bloomberg poll and after a 4% drop in February, according to the National Association of Realtors.

Technically, the last index’s consolidation came as a result of its dependence on a major bullish trend line in the medium term, as shown in the attached chart for a (daily) period. This is in conjunction with its dependence on the important support level 33,271.90. We notice in the midst of that the emergence of a positive crossover in the relative strength indicators after they reached the areas. The index is oversold with selling operations, which may have gained the index some positive momentum that helped it achieve those slight gains. This is amid the continued negative pressure of its trades below the simple moving average for the previous 50 days, with the dominance of the corrective bearish trend in the short term.

Therefore, our expectations remain neutral, waiting for the index’s behavior towards the support level 33,271.90. If the index breaks this support, it means declaring the continuation of the corrective bearish trend in the coming period in the near term, after which the index will continue to decline, targeting the first support levels at 32,071.40.

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