Our expectations indicate more decline for the index during its upcoming trading, especially in case it breaks the main support 34,000, to target the support level 33,271.90 after that.
The Dow Jones Industrial Average continued to decline in its recent trading at the intraday levels, to record losses for the third consecutive day, by -0.68%. The index lost by -232.85 points to settle at the end of trading at the level of 34,079.19, after its decline in trading on Thursday by -1.78 %. During the past week, the index declined for the second week in a row by -1.9%.
US stock index futures fell sharply Monday evening, as Russian President Vladimir Putin ordered the deployment of troops to separatist regions inside Ukraine after recognizing its independence, a move some fear puts Ukraine and Russia one step closer to military conflict.
Markets in the US were closed Monday in observance of Presidents’ Day, and Tuesday’s trade will provide the first opportunity for investors to react to developments in Eastern Europe.
Markets took heavy losses on Tuesday as Putin on Monday ordered troops to “keep peace” in the breakaway regions of eastern Ukraine. The announcement raised fears that kept trading volatile that an invasion was imminent.
The White House said President Joe Biden will issue an executive order “prohibiting investment, trade, and new financing by American persons” in those areas.
Meanwhile, EU officials have referred to Putin’s recent moves, including recognizing the independence of Russia’s breakaway regions of Donetsk and Luhansk, as a “blatant violation of international law”.
Technically, the index continued to decline amid the continued negative pressure of its trading below the simple moving average for the previous 50 days, with the influx of negative signals on the relative strength indicators, despite reaching oversold areas.
This is in light of the dominance of a bearish corrective wave in the short term, to reach the index in its recent trading to rely on a bullish trend line in the medium term, as shown in the attached chart for a (daily) period, in conjunction with its base on the main support level 34,000.
Therefore, our expectations indicate more decline for the index during its upcoming trading, especially in case it breaks the main support 34,000, to target the support level 33,271.90 after that.
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