DJI Gaps Higher From Its Bullish Triangle

The Dow Jones Industrial Average closed to its highest level since October yesterday. Given the strength of its underlying trend, its breakout could have further to go.

Overall, momentum since December’s V-bottom has been firmly bullish, although price action had been coiling up within a triangle pattern since late February. Still, the pattern has held above the 200-day average and stopped just of the 23.6% Fibonacci retracement level which makes it a relatively shallow retracement in the grand scheme of things. Yesterday’s gap higher saw price action jump convincingly out of the triangle and has stall at the November high.

From here, we’ll see how prices react around resistance. To remain bullish we’d like to see prices how above the gap around 26,000 or, at the very least, find support above the broken triangle. Direct gain would be of interest on intraday timeframes. However, if trading the daily timeframe, could make more sense to see if the 26,300 area holds as support if a break higher is seen.

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