Dow Jones Index Forecast
Explanation to Bollinger's Bands
Bollinger Bands was created by John Bollinger in the early 1980s, its purpose is to define price action relative to the assets highs and lows. This technical indicator is used to identify buy and sell signals and has proven very well in doing so.
Bollinger Bands consist of a set of three curves drawn in relation to securities prices. The middle band is a measure of the intermediate-term trend, usually a simple moving average, that serves as the base for the upper and lower bands. The interval between the upper and lower bands and the middle band is determined by volatility, typically the standard deviation of the same data that were used for the average. StockInvest.us uses Bollingers suggested 20 day average.
Middle Bollinger Band = 20-period simple moving average
Upper Bollinger Band = Middle Bollinger Band + 2 * 20-period standard deviation
Lower Bollinger Band = Middle Bollinger Band - 2 * 20-period standard deviation
BandWidth defines the current width of the band.
%b defines the current position within the band.
BandWidth = (Upper Bollinger Band - Lower Bollinger Band) / Middle Bollinger Band
%b = (Last - Lower Bollinger Band) / (Upper Bollinger Band - Lower Bollinger Band)
Live Samples:
Bottlenecks in bandwidth indicate an upcoming change. Break up through the moving average line or continuous movements above the moving average line indicate a break up, and vice versa.
Source: http://www.bollingerbands.com
Dow Jones index price up 0.318% on Friday
(Updated on May 10, 2024)
The Dow Jones index price gained 0.318% on the last trading day (Friday, 10th May 2024), rising from 39,387.76 points to 39,512.84 points. It has now gained 8 days in a row. It is not often that indices manage to gain so many days in a row, and falls for a day or two should be expected. During the last trading day the index fluctuated 0.441% from a day low at 39,406.26 points to a day high of 39,579.88 points. The price has risen in 9 of the last 10 days and is up by 3.33% over the past 2 weeks. Volume fell on the last day by -18 million shares and in total, 290 million shares were bought and sold for approximately 11.44 points trillion. You should take into consideration that falling volume on higher prices causes divergence and may be an early warning about possible changes over the next couple of days.
The indexis at the upper part of a horizontal trend and normally this may pose a good selling opportunity but a break-up through the top trend line at 39,588.29 points will give a strong buy signal and a trend shift could be expected. Given the current horizontal trend, you can expect Dow Jones index with a 90% probability to be traded between 37,171.23 points and 39,140.64 points at the end of this 3-month period. A break of a horizontal trend is often followed by a large increase in the volume, and indices seldom manage to go directly from the bottom of a trend up to the top. Indices turning up in the middle of a horizontal trend are therefore considered to be potential runners. Do note, that if the stock price manages to stay at current levels or higher, our prediction target will start to change positively over the next few days as the conditions for the current predictions will be broken.
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^DJI Signals & Forecast
The Dow Jones index holds buy signals from both short and long-term Moving Averages giving a positive forecast for the stock. Also, there is a general buy signal from the relation between the two signals where the short-term average is above the long-term average. On corrections down, there will be some support from the lines at 38,942.12 points and 38,656.12 points. A breakdown below any of these levels will issue sell signals. A buy signal was issued from a pivot bottom point on Tuesday, April 30, 2024, and so far it has risen 4.49%. Further rise is indicated until a new top pivot has been found. Furthermore, there is a buy signal from the 3 month Moving Average Convergence Divergence (MACD). Volume fell during the last trading day despite gaining prices. This causes a divergence between volume and price and it may be an early warning. The index should be watched closely.
A buy signal from a double bottom formation was found on Tuesday, April 30, 2024 with a target of 38,985.60 points. Despite whether the objective of the signal formation has been reached the index may continue to perform well.
Support, Risk & Stop-loss for Dow Jones index
Dow Jones finds support from accumulated volume at 38,996.39 points and this level may hold a buying opportunity as an upwards reaction can be expected when the support is being tested.
In general the index tends to have very controlled movements and with good liquidity the risk is considered very low in this stock. During the last day, the index moved 173.62 points between high and low, or 0.441%. For the last week the index has had daily average volatility of 0.623%.
Since the Dow Jones has been rising for 8 days in a row, the risk over the next couple of days has increased. As we cannot be certain with regards to the size of the reaction, we urge caution.
Our recommended stop-loss: 37,923.22 points (-4.02%) (This index has low daily movements and this gives low risk. There is a buy signal from a pivot bottom found 8 days ago.)
Trading Expectations (^DJI) For The Upcoming Trading Day Of Monday 13th
For the upcoming trading day on Monday, 13th we expect Dow Jones Industrial Average to open at 39,499.66 points, and during the day (based on 14 day Average True Range), to move between 39,141.83 points and 39,883.85 points, which gives a possible trading interval of +/-371.01 points (+/-0.94%) up or down from last closing price. If Dow Jones Industrial Average takes out the full calculated possible swing range there will be an estimated 1.88% move between the lowest and the highest trading price during the day.
Since the stock is closer to the resistance from accumulated volume at 39,760.08 points (0.63%) than the support at 38,996.39 points (1.31%), our systems don't find the trading risk/reward intra-day attractive and any bets should be held until the stock is closer to the support level.
Is Dow Jones Industrial Average index A Buy?
Dow Jones holds several positive signals, but we still don't find these to be enough for a buy candidate. At the current level, it should be considered as a hold candidate (hold or accumulate) in this position whilst awaiting further development.
Current score: 0.359 Hold/Accumulate Unchanged
Predicted Opening Price for Dow Jones Industrial Average of Monday, May 13, 2024
| Fair opening price May 13, 2024 | Current price |
|---|---|
| 39,499.66 points ( 0.0334%) | 39,512.84 points |
The predicted opening price is based on yesterday's movements between high, low, and closing price.
Trading levels for ^DJI
Fibonacci Support & Resistance Levels
| Level | Price | |||
|---|---|---|---|---|
| Resistance | R3 | 39,673.28 | 0.406 % | |
| R2 | 39,606.96 | 0.238 % | ||
| R1 | 39,565.98 | 0.134 % | ||
| Current price: | 39,512.84 | |||
| Support | S1 | 39,433.34 | -0.201 % | |
| S2 | 39,392.36 | -0.305 % | ||
| S3 | 39,326.04 | -0.473 % |
Accumulated Volume Support & Resistance Levels
| Level | Price | |||
|---|---|---|---|---|
| Resistance | R3 | 39,807.37 | 0.745 % | |
| R2 | 39,781.37 | 0.680 % | ||
| R1 | 39,760.08 | 0.626 % | ||
| Current price | 39,512.84 | |||
| Support | S1 | 38,996.39 | -1.31% | |
| S2 | 38,714.77 | -2.02% | ||
| S3 | 37,815.92 | -4.29% |
FAQ
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