The US 30 stock index has repeatedly closed at new record highs in November, with the series of higher peaks and higher troughs on the daily chart confirming the resumption of the longer-term uptrend. The picture is positive across all timeframes – short, medium, and long-term – though the RSI is indicating that the latest pullback may continue in the immediate term.
Having touched its 70 line, the RSI has turned lower, a sign that the bulls may be losing strength. The MACD however, looks ready to cross above its red trigger line soon, and if so, that would be a positive sign.
If the latest retreat continues in the very near term, initial support could come from the intersection of the 27,650 zone and the 20-day simple moving average (SMA). Even lower, the previous all-time high of 27,400 may halt the bears.
On the upside, if buyers overcome the latest record high closing price of 28,155, that would bring the index into unchartered waters again, and the next target may be the round figure of 28,500. Higher still, the psychological mark of 29,000 would attract attention – this also being the 161.8% Fibonacci extension of the upleg from 24,600 to 27,400.
Summarizing, the overall outlook is clearly bullish, though the RSI does suggest some caution in the immediate term.
