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Video / 07 June 2016 at 6:44 GMT

Dow could break channel top: O'Hare

Steve O'Hare - First 4 Trading
Steve O'Hare from is looking to go long on the US30 index. O'Hare explains why in a technical analysis. 

The weekly chart posted a bullish formation which looks similar to a morning star formation which normally occurs at the end of a downtrend. This indicates good potential for a move back towards the channel top which comes in around 18,220. 

Indicators such as MACD and RSI show that momentum remains positive as the pullback from recent highs remains above the previous downward trending resistance on a closing basis. 

The daily chart highlights a couple of interesting looking formations with dips continuing to attract buyers and MACD indicating a positive skew on daily momentum also. An AB=CD correction looks to target 18,250 and this lines up with the 161.8% Fibonacci projection. The Ichimoku cloud has acted as support and provides an ideal platform to launch a further drive higher. 

O'Hare looks to set longs around current levels (17,900) and on a dip to 17,750 with a hard stop placed at 17,600. The target is 18,250 and possibly towards the 18365 all-time high.


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