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Wednesday, December 2, 2020

Dow Jones Industrial Average weakened on a weekly basis but remains in a bull market

  • If the price jumps above 29,000 points the next target could be located around 29,500 or even 30,000 points
  • The US reported a record high of 82,668 cases on Saturday
  • The focus in the US shifts to the upcoming presidential election on November 3

Concerns about sluggish economic growth amid the ongoing pandemic continue to dominate the financial markets. Despite this, traders are ignoring record coronavirus contagions and the US indices remain in a bull market.

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The Nasdaq Composite and S&P 500 advanced on Friday while the Dow Jones Industrial Average (DJIA) index weakened 0.1%. The US reported a record high of 82,668 cases on Saturday and risk aversion will likely prevail at the beginning of the week.


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The attention of investors is focused currently on the US stimulus aid package negotiations and the upcoming presidential elections. The US presidential elections will be on November 3 and according to the polls, US President Trump’s rival, Joe Biden, leads.

Democrats and Republicans are using a coronavirus aid package as an election tool, both parts have reported “progress,” but continued to extend discussions. There are little chances of an aid bill being approved before November 3 because it would need to pass Congress.

Drugmaker Pfizer announced that it could have a coronavirus vaccine ready in the United States by the end of this year. Vaccines and treatments are still under study and advancing, but there’s no magic solution yet. Even further, there won’t be one in the foreseeable future. and that means more economic contraction or in the best-case scenario, slow growth.

DJIA down 0.9% on a weekly basis

For the week, the Dow Jones Industrial Average (DJIA) weakened 0.9% and closed at 28,335 points.

Dow Jones Industrial Average weakened on a weekly basis but
Data source: tradingview.com

On this chart, I marked important resistance and support levels. The important support levels are 27,000 and 26,000 points, 29,000 and 30,000 points represent the resistance levels. If the price jumps above 29,000 points it would be a buy signal for Dow Jones Industrial Average (DJIA) and we have the open way to 30,000 points.

Rising above 30,000 points supports the continuation of the bullish trend and the next price target could be located around 30,111. On the other side, if the price falls below 27,000 points it would be a “sell” signal and we have the open way to 26,000 points.

Summary

The Dow Jones Industrial Average (DJIA) weakened on a weekly basis but remains in a bull market. The US reported a record high of 82,668 cases on Saturday and risk aversion will likely prevail at the beginning of the week. The attention of investors is focused currently on the US stimulus aid package negotiations and the upcoming presidential elections.

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