Welcome to the home for real-time coverage of U.S. equity markets brought to you by Reuters stocks reporters and anchored today by Chuck Mikolajczak. Reach him on Messenger to share your thoughts on market moves: charles.mikolajczak.thomsonreuters.com@reuters.net
DJIA: CAN IT FOLLOW THROUGH (0915 EDT/1315 GMT)
After testing support, the Dow Jones Industrial Average .DJI vaulted sharply higher on Tuesday. That said, the blue-chip average still needs to follow-through to the upside to reclaim its 200-day moving average (DMA) and add weight to the bull turn. (Click on chart below)
Indeed, the Dow hit a low of 24,680.57 on Monday, nearly filling the still open January 30 gap (down to 24,674.87). The index then recovered enough to close above the 38.2% Fibonacci retracement of its December/April advance (at 24,792.29).
Tuesday's subsequent 2% thrust proved to be the second best day of the year, putting the index within 0.4% of reclaiming its 200-DMA (25,426.59 Tuesday's close). With CME E-Mini Dow Futures 1YMc1 suggesting the Dow index will open about 100 points higher, the 200-DMA can be challenged in early trade.
Meanwhile, if the Dow is forming a large expanding triangle since early 2018, a rally should quickly turn more significant with the potential for marginal new highs to challenge the pattern's upper boundary.
However, an inability to sustain a follow-through from Tuesday's thrust may be a warning. Reversing below 25,075 support can put Monday's low and the gap at risk again.
(Terence Gabriel)
*****
