Wall Street closed with tepid losses yesterday, with the Dow Jones Industrial Average down by 13 points at 17,217.11. The Nasdaq lost 24 points, whilst the S&P edged 2 points lower.
The drop was led by the healthcare and biotech sector, whilst earnings results came out mixed, with Verizon and United Technologies presenting strong quarterly results, but IBM disappointing investors with poor results and a lower forecast.
The Dow however, held near its recent two-month high, and the daily chart continues supporting further gains, as the index is well above a bullish 20 SMA, whilst the technical indicators consolidate near overbought territory, far from suggesting an upcoming decline.
In the 4 hours chart, the index holds a few points above a mild bullish 20 SMA, although the technical indicators have turned lower and are nearing their mid-lines, in line with a downward move on a break below 17,168, the immediate support.
Our preference for Dow: Short positions below 17170 with targets @ 17010 & 16945 in extension.
Alternative scenario: Above 17170 look for further upside with 17200 & 17300 as targets.
Comment: The index currently faces a challenging resistance area at 17170.