Dow Jones Technical Outlook: DJIA Bulls Caught at November Highs

(MENAFN – DailyFX) Dow Jones Talking Points: – The Dow Jones Industrial Average has started Q2 with continuation of Q1 strength, breaking above a bull pennant formation while rallying up for a test of resistance around five-month-highs.

– Key for this theme of Dow strength has been recovery in the largest DJIA component of Boeing (BA), which has held a confluent zone of Fibonacci support despite the negative drivers around the company that showed up in March.

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Dow Rally Extends to Five-Month Highs The US equity rally has extended into the opening days of Q2, and this follows a very strong showing in Q1 as the previous quarter’s slump was soundly broken; and prices in the Dow are trading near five-month-highs. The fourth quarter of last year brought a stark change-of-pace to the risk trade, as a comment from Chair Powell in the opening days of the quarter alluded to a continued pace of tightening at the Fed looking-forward into 2019. But as the Dow turned-over, FOMC commentary started to get more and more passive until, eventually, the bank did away with expectations for rate hikes in 2019.

This has helped the US equities to run-up to a fresh five-month and 2019 highs: The Dow Jones continues to lag-behind the more broad-based S & P 500 due to setbacks in the index’s largest component of Boeing, which currently comprises more than 10% of the Dow Jones Industrial Average. In the

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