This chart of the Dow Jones Industrial Average (DJIA) on the 1-hour timeframe shows the price around 46,160, approaching a key supply zone.
Key Levels on the Chart
Demand Zone
Located between 45,700 – 45,850
This area has previously acted as strong support and triggered buying reactions.
Supply Zone
Located between 46,200 – 46,300
Price is approaching this level, which has historically caused reversals.
Possible Scenarios
🔻 Scenario 1: Bearish Reversal from Supply Zone
As suggested by the dashed line on the chart, sellers may step in once price reaches the red zone, pushing it lower.
The potential target for this move would be the demand zone around 45,750 – 45,850.
✅ Why this Scenario Makes Sense:
Overlap with a strong previous resistance
Weak bullish candles near resistance
Liquidity and stop-loss clusters likely below the current price
🔼 Scenario 2: Breakout and Continuation to the Upside
If the price breaks and holds above 46,300, it could trigger a bullish continuation toward 46,450 – 46,500.
✅ Why this Scenario Makes Sense:
Indicates strong buying pressure
Triggers stop-losses of sellers, adding more upward momentum
Suggested Strategy
Short-term traders: Consider short positions near the supply zone with a stop-loss above 46,320. First target would be around 45,800 (green zone).
Trend traders: Wait for a confirmed breakout and retest above the red zone before entering long positions for a safer setup.
Conclusion
The market is currently at a critical level. The reaction to 46,200 – 46,300 will likely determine the next major move. The bearish reversal has a slightly higher probability, but confirmation through weak bullish candles and selling volume is key.
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