Dow Jones Forecast: Rebounding into the Bullish Channel

The Dow Jones Industrial Average (DJIA) has rebounded into its up-trending parallel channel, established between May and December 2024. The latest dip outside the channel retested the November 2024 low at 41,739 before climbing back above the 43,000-barrier. Bullish momentum faces a test with Trump's return and upcoming Q4 earnings reports.

Fibonacci Retracements and Key Support Levels
Using the retracement tool for the range between April 2024 (37,700) and December 2024 (45,078), key support levels have been identified.

If the Dow reverses back outside the channel and falls below the 42,400 and 41,800 support zones, declines could extend to critical support levels at 41,400, 40,400, and 40,000, aligning with the 50% and 61.8% Fibonacci retracement levels.

Fibonacci Extensions and Key Resistance Levels
Using the extension tool for the range between April 2024 (37,700), December 2024 (45,078), and January 2025 (41,739), key resistance levels have been derived.

A close above the 43,700 high (0.272 Fibonacci) will bring the next resistance levels into view: 44,500, 45,200, and 46,000, aligning with the 38.2%, 50%, and 61.8% Fibonacci extension levels.

— Razan Hilal, CMT