Friday’s Technical Outlook for the DJIA (.DIA)

$DIA, $.DJI

US stocks finished sharply lower Thursday after data showed US GDP growth advanced at its slowest pace in 2 years and jobless claims rose more than expected.

The DJIA lost 210 pts, or 1.17%, to close at 17,830.76, recording the biggest 1-day fall since 11 February 2016.

The S&P 500 fell 19 pts, or 0.92%, to 2,075.81, the NAS Comp dropped 57 pts, or 1.19%, to 4,805.29.

On the data front

US GDP slowed to 0.5% in Q-1 according to the 1st advance estimate, missing expectations of 0.7% growth.

Separate data showed initial jobless claims rose more than expected to 257-K in the week ended 22 April, raising concerns over the economic health of the world’s largest economy.

The technical picture

The DJIA daily shows that the index fell below its 20-Day SMA for the 1st time in over 2 weeks, the technical indicators have turned due South, but are not yet breaking into negative territory.

In the 4 hours, the technical outlook is Bearish, given that the technical indicators maintain strong Bearish slopes well below their mid-lines, while the index is now below its 20 and 100-Day SMA’s.

Commentary

DJIA at 17830.76, -1.17% was hurt by a weaker than expected Q-1 GDP growth data and now shows the initial signs of an extended pullback to 17500-400. If the correction fails to be contained at 17400, see 17200 next, or then Dow 16800 will come into view.
As I write this report (3:57a EDT) the DJIA mini June futures are trading at 17,755.

Support marks:17,775 17,730 17,651
Resistance marks: 17,904 17,985 18,046

Stay tuned…

Paul Ebeling

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