The International market selloff has put the start of a Christmas rally into question as the Dow closed lower by 2.21% erasing all gains we have seen this year for the Index.
Taking a closer look at the chart of Wall Street 30 we can see that the inverse head and shoulders (IH&S) technical pattern did not form and the selloff just continued. The price action has found some support at the 24372 level but needs to hold at this level to curb a further downturn.
Price Elements to look out for, possible descending channel forming, but we will need to see Lower highs and lower lows forming. Price action is still below the 200-day SMA (red line). The price action might reverse today as short sellers take profits and buyers enter the market, which might drive the price higher back to the 24966 level.
Let's look at the charts...
Source – MetaTrader5
Indicator Elements to look out for would be the Relative Strength Index (RSI) is just above the 30 level and not oversold, so the price action can go lower or reverse from here. The Moving Average Convergence Divergence (MACD) is still negative below the zero “0” line and has not signalled a buying opportunity yet. Looking at the Fibonacci Retracement (Fib) the price is finding some resistance at the 76.4 level. If the price action moves through this level the important 61.6 Fib level comes into play which coincides with the 24966-price level.
Source – MetaTrader5
Image Source: Wolf of Wall Street
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