DJIA has been consolidating within a potential 3-1/2 week expanding
triangle (a potential topping pattern) under the record high at 15658 (2 Aug).
The bullish momentum seems to be waning as potential 3-month bearish divergence
(from May 22 and Aug 2 highs) is forming. While the 15658/the rising trendline
(from 18 Jul high/1/2 Aug highs) resistance zone caps further gains, a push
below the key 15405 support (26 Jul low) would suggest completion of the
expanding triangle topping pattern and trigger more downside towards 15230
(38.2% of 14551/15658 rise) which is also near 8-month bull channel support
(from Nov 2012 low). Further weakness below the latter would expose the 5-month
bull channel lower bounds (19 Mar/19 Apr/24 Jun lows) currently at 14615 for a
retest.
However, if the 15405/15230 support zone holds,
consolidation would continue. An upside break above 15658 would confirm a
higher base and stage the potential upside target at 16250 which is near the
converging point of the 53 month bull channel (from Mar 2009 low) and the
aforementioned 8-month bull channel upper bounds.
The long term uptrend remains intact while the 4.5-year bull
channel support holds.
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