DJI 30 at record highs! Pull back to the 20 DMA?

By Admiral Markets

Global stock market indices have continued to rally higher but the unevenness in momentum across different regions and sectors still remains. For example, the Nasdaq 100 currently trades below its record all-time high price level while the Dow Jones 30 (DJI 30) index trades well above its record high.

This highlights the current theme that has developed in the markets – a rotation out of high-flying tech stocks into more value-based stocks. The Dow Jones 30 index comprises of a variety of companies from the different sector but leans heavily towards industrial, financial and energy companies.

Source: Admirals MetaTrader 5, DJI30, Daily – Data range: from Jul 2, 2020, to Mar 16, 2021, performed on Mar 16, 2021, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results. Last five-year performance: 2020 = +7.09%, 2019 = +22.66%, 2018 = -5.46%, 2017 = +24.76%, 2016 = +12.74%, 2015 = -2.28%. 

The trend of the DJI 30 index still remains bullish, as seen on the daily chart above. Price is still above its 20-period (blue), 50-period (red) and 100-period (green) exponential moving averages.

Buyers have been stepping in at these moving average levels on the way up. As the price is currently overextended away from the 20-period moving average, traders may look to this level as the first area where buyers could initiate fresh positions.

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By Admiral Markets