The Dow Jones Industrial Average ($DJI) logged new intraday highs of 40,257.24 on Friday but couldn’t quite manage a new closing high. The Dow has rallied about +4.4% since the lows on Jun. 14 and Dow Futures (/YM) are on the move to the upside again this morning, so the underlying index should be an interesting product to watch to start off the week.

The $DJI’s movement for much of the 2024 year has been contained within a rising wedge-type shape, with a modestly sloping upward trendline going across the lows from late January, mid-April, and late May. But more recently, price is experiencing a shorter-term upward trendline beginning with the previously mentioned low point on Jun. 14 that is still currently in play. The 21-day Exponential Moving Average was supportive many times in recent weeks, and seemed to provide a foothold for price.

Momentum is also following suit with price. The Relative Strength Index (RSI) has been trending upward in a similar fashion to price, and this indicator crossed above the “overbought” threshold of 70 on Friday. This is typically regarded as bullish, and a sign of further strength to come in trending markets. But it’s important to remember that price is the most important factor in trading, and the fact that it has? not managed a close above its previous high close is worth noting.

If price does continue to move to the upside, the old highs present a resistance confluence because they line up quite closely with the upper boundary of the rising wedge shape, as well as the yearly Linear Regression Line. This is commonly referred to as a line of best fit and can be used by traders to assess some notion of fair value for a financial product. If price were to crack this ceiling, the +1 Standard Deviation Channel (which is one standard deviation above the yearly Linear Regression Line) comes in near 42,285 and could be viewed as a possible point of resistance. To the downside, the 21-day EMA and the aforementioned short-term upward trendline offer up another confluence to consider near about 39,305.

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