After a major dip to $18,900 occurred in the price of Dow Jones in March 2020. Price retraced to the resistance level at $29,500 in the same month. $DJI broke the resistance level at $29,500 in November 2020. Since this breakout occurred, $DJI has consistently reached a new all-time high every month. The recent all time high occurred this week at $35,100. $DJI’s price at the beginning of this year was at $30,200. As at today, price of $DJI is at $34,000, which is about 11% gain in 2021.
After the all-time high at $35,100 was reached this week, two bearish candlesticks were formed in the next days. These two candlesticks were as a result of the inflation data that was released on Wednesday. the $DJI plunged 680 points. Investors might have been fearful, hence the reason for the selling. Both S&P 500 and NASDAQ also took a nosedive. Could this be sign of the beginning of a bearish trend?
When a major dip occurred in March 2020, RSI showed price has been overbought. RSI is currently showing that p rice has been overbought. This could lead to a major dip in price. If this dip occurs, it might make price reach the support level at $26,550. If In the next few weeks, price might just be consolidating around $34,000. If the inflation situation worsens, price might plunge further.