DIA pushes through Thursday's high
SPDR Dow Jones Industrial Average (DIA) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
DIA finished the month 2.54% higher at 264.42 after gaining $1.14 (0.43%) today. Trading up to $3.54 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 263.82, the ETF confirmed its breakout through the prior session high after trading up to $0.67 above it intraday.
Daily Candlestick Chart (DIA as at Jul 31, 2020):
Friday's trading range has been $4.27 (1.62%), that's above the last trading month's daily average range of $3.43. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DIA.
One bullish candlestick pattern matches today's price action, the Takuri Line.
Buyers managed to take out the key technical resistance level at 264.05 (now S1), which is likely to act as support going forward. After having been unable to move lower than 259.94 in the previous session, SPDR Dow found buyers again around the same price level today at 260.22. The last time this happened on Wednesday, DIA actually lost -0.84% on the following trading day.
Although DIA is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the nearby swing high at 266.07 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 259.94 where further sell stops might get triggered. As prices are trading close to July's high at 270.54, upside momentum could accelerate should the market mark new highs for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for SPDR Dow. Out of 568 times, DIA closed higher 56.16% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 63.91% with an average market move of 0.64%.