- 85% of the daily bars have closed green since the end of October.
- The weekly chart shows a significant all-time high breakout.
- Levels to watch.
Introduction
Along with all other US indices, YM is ripping, and there are no signs of it slowing down any time soon. The Dow Jones blasted through an all-time high on Monday and has already painted three green bars straight and over 2% above the previous high. Let’s look at the technicals and see if there are any levels to watch.
Weekly Chart
If this week continues in the same fashion it started, it will be seven straight weeks of green candles. There are no bearish signs at all on the YM chart, but there are also no bullish signs. Traders who missed the opportunity to go long might run the risk of chasing the market higher if they buy now. The RSI is flirting with overbought territory, but since this a breakout and not the end of an up trend, we can’t look at it as a signal to sell. RSI overbought signals are only valid if there has been a previously established uptrend.
Daily Chart
The daily chart is a bull’s dream because there are virtually no red candles in one and a half months of trading. 85% of the days since the beginning of November have closed up. The 50-moving average is also close to crossing above the 100-moving average. Traders need to be cautious, though, and if they do decide to go long, it would be with a long-term view in mind. There could be better prices to do so in the future. Short to medium traders would likely be better off waiting for a retracement to follow. We may see some support around the previous all-time high and a candlestick reversal would be a good signal for the bulls.
We recently posted about guidelines to follow when trading the OneUp Trader Evaluation. You can read that here.
