Dow is consolidating in 20500 zone on Tuesday after extension of pullback from 21160 peak hit fresh low at 20355 on Monday. Rising 55SMA contained dip, offering solid support at 20393 today.
Yesterday’s strong downside rejection that left long-tailed Doji candle, signals indecision that may result in extended consolidation.
Upside attempts were so far capped by falling and thickening hourly cloud that prevents near-term studies of further strengthening.
Daily technicals are weak and favor renewed attacks at 55SMA, break of which would expose the top of rising daily cloud (currently at 20318), which is expected to ideally contain correction from 21160.
Meantime, extended upticks cannot be ruled out, with initial barrier at 20607 (broken Fibo 38.2% of 19713/21160) and daily Tenkan-sen (currently at 20692) expected to cap.
Res: 20539; 20607; 20663; 20692
Sup: 20498; 20437; 20393; 20355
