Hi everyone, welcome back!
Today I want to analyze the weekly chart of Dow Jones (DIA)
Last week I highlighted a possible weekly divergence on the indexes, and it looks like although Dow Jones has gone up 10 weeks in a row, there’s a much better risk-reward skewed towards the downside.
This represents a good short opportunity.
Notice how the RSI keeps getting lower despite the index making new highs. This displays weakening momentum. I think shorting near 265 with a stop loss near the 270 range is a good trade. Your profit exit would be in the 245-250 range, depending on how greedy you want to get with your risk-reward 🙂
See you next week.