Monday's Market Minute: Equities Jump Higher, But Can Sluggish Dow Clear Resistance?

Dow futures are little changed since the start of 2023, but bulls have seen some potentially promising action lately. The /YM is up almost 6% as of Friday’s close since the lows of early March, aided in part by Friday’s 1.3% rally. The contract is on the verge of breaking above a sticky point of frequent support and resistance during the past year in the 33,600 level.

The 21-day and 63-day Exponential Moving Averages, which can be used to help traders assess trend direction, have switched from sloping downward to upward in recent weeks. Momentum also looks to favor the bulls, as the Relative Strength Index (also known as RSI, which helps gauge the speed and magnitude of price movement) is above 50 and trending up while making new highs above its previous peak in early March.

Bulls have plenty of support to consider to the downside. The 21-, 63-, and 252-day EMAs, all are roughly within a 200-point range between about 32,860 to 33,060. This zone also includes the 33,000 level, which has been another source of frequent support and resistance during the past year. But the bears also have some upside hurdles to which they can point.

For one, the yearly Volume Profile Point of Control (the price level with the heaviest trading activity) can be a significant source of support or resistance and it comes in around 33,850, so beware of consolidation around this area. Consider as well that the Dow is still in an overall downtrend that began with the Nov. 30 close and travels down near the January and February highs. This level will be crucial for the bulls to clear, so watch out for more resistance near the 34,000 level based on that.

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