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Is the US30 recovery under pressure?

jeffriess
March 5, 2020
by Joseph Jeffriess, Market Analyst

Stock futures are back under pressure, could it extend tonight?

After three sessions that have produced a 7.48% pullback on the US30, sellers are once again starting to regroup. The US30 currently sits 1.56% lower in today’s out of hours session.

Looking at the current daily chart we can see a few signs pointing to greater seller numbers – the most obvious one being the current decline.

Price finished yesterday’s session below 26,990, which reconfirmed this level as resistance. This point also lined up with a previous low set back in October 2019. Resistance at previous lows is seen by technicians as added confirmation to the resistance level. The counter-rally has also started stalling under the 50% Fib point, which is seen as the normal range for a counter-trend to restart the main trend. Fib points are guides and are not usually seen as exact resistance or support points. Finally, there’s the Willams Percentage Range. When the indicator moves above the -50 and then returns below it in the direction of the trend, this can help to confirm seller momentum and show that a trend continuation could be forming. As with all momentum indicators, they are a guide and should be used in conjunction with other price analysis.

On the flip side, we’re still out of hours and if buyers can stop the current decline and move back above / close above 26,990, the current seller signs would be on hold or possibly cancelled. If we do see selling continue tonight, we would be looking for buyers to possibly show some resistance at the main support, if reached.

Good trading from Eightcap.
All times are AEDT.