25.02.2020 | The Dow Jones Index Dropped Over 1,000 points, What Now?


good morning guys this is a mouse um

chief market analyst at a betrayed in

today's technical analysis segment we're

going to focus at Dow Jones only to gain

to look at from the perspective of what

happened yesterday because remember that

the Dow Jones index dropped over 8,000

points yesterday and now we wanted to

look at what does that mean in terms of

a price action and if more important if

there are any opportunities are there so

let's begin with that idea and let's

devolve into it and then the CFA how can

we shape it up in terms of a trading

opportunity but before we do that it's

important that we go from disclosures

and risk warnings so anything which will

be discussed in this particular video

cannot be perceived as an advice if you

are see here for one please do consult

with your own financial advisor who

would be in a much better position to

help you and guide you with respect to

that now having all the legal eagles

done let me bring the Bloomberg

professional platform in front of you

and then let me show you what does it

really mean from a perspective of price

action remember you all what I'm doing

is I'm just showing you guys where the

important levels are and how to look at

them how to form them how to view them

now let's look at the price action so

the the chart which is right in front of

you it's a daily timeframe chart as you

can see it's a daily timeframe is a

one-year time overall we'll be looking

at over a period or for one year and

what I'm looking at is the gap between

the Friday's closed and yesterday is

open so the which is marked by this

particular part this particular

rectangle should in white now in terms

of us moving averages as all of you know

that I love the smooth moving averages

so the 50 is shown in prank in the green

is in in the hundred is in green and the

200 is shown in yellow now in terms of

in terms of levels obviously we've seen

this extensive sell-off the sell-off

which pushed the price below the 50-day

moving average for the Dow Jones index

confirming that the Bulls are no

in control of the price and more

importantly what happening yesterday

with respect to the Dow Jones index is

that we not only cross the handed a

moving average but the price lost below

that level now we have entered into this

critical area of support zone of the

area where we've seen we saw this this

rally going all the way to the upside

and then the price right below the

50-day and then boom we formed another

record high now that record high is our

major resistance zone but before that we

have two major points we have two

critical points those critical points in

terms of resistances are your 50 and

your hundred a moving average now

depending on the price action how it

opens today because the futures are

pointing to the downward to the downside

right now but depending how the market

will react how how the sentiment is

perceived by the market participants if

the price moves above be hundred a

moving average then this could be the

opportunity that we have been waiting

for because a price did enter into well

into this important area of support zone

however if the price fails to break

above the hunger day moving average and

breaks below this particular support

zone then the next important support

area where we are focused on is near the

hundred day moving average where Joe

started a moving average which is shown

by this particular line in yellow and

the area that what I'm really focus on

is just around this area because this is

where the it all rally started this is

where the previous consolidation happen

this is where what we can see either the

double top was because one top formed

here the other top formed here and then

boom the price kind of took off this is

the area what I'm looking at but equally

investors can look and this particular

candle the big gap when the price moved

to the downside and the gap was filled

after that two days you know the price

filled in that gap between this candle

and this candle and then boom the price


the search happened to the upside

and then we came by formula perfect

consolidation and then after that the

price sausage to continue to move to the

upside but now this area is violated

this area of support zone if I draw this

area of support zone let me draw that

for you guys so that you can clearly see

I'm talking about this particular area

supports on this was clearly violated

because the price move below that now

you can you can always say that okay

what about this particular area can we

not consider this one as a as an area of

support yes of course you can consider

that as an area support but this area of

support isn't really that strong this

area of support isn't as good the one

which is just right below that so you

can consider that but the thing is that

the price I like to consider the area

when the price is in line with the

moving averages and for that particular

reason I'm looking at this particular

area of support zone which runs by the

way which runs from two seven two to

four all the way to two seven zero two

for this particular area support runs

from two seven nine four nine two seven

eight one six if you wanted to consider

this one this runs from two seven five

three five all the way to two seven

three eight two and the gap is between

two eight nine nine two two two eight

four zero nine but the area where we do

the in terms of a resistance this is the

thing it is more likely to be near the

50-day moving average that's all for

today hi happy trading and see you guys