Dow Jones - 04 Apr 2025

Chart Analysis – Dow Jones Industrial Average Index (DJI)

Ticker: DJI
Timeframe: 1W (Weekly)
Current Price: 38,314.87
Weekly Change: -3,269.04 (-7.86%)

---

🔍 1. Trend Analysis

• Trend Direction:

  • Current Trend: Downtrend

  • The recent high was at 45,073.63, followed by a steep drop, breaking previous swing lows near 40,000 and 38,000, confirming a lower high and now a potential lower low structure.

• Signs of Weakening Before Reversal:

  • Before this massive red bar, there were already signs of slowing upward momentum (e.g., smaller green candles and more overlapping bars).

  • The latest weekly bar is extremely bearish, suggesting strong selling pressure.

---

📌 2. Key Price Action Signals

• Strong Trend Bars:

  • The latest bar is a massive full-bodied red candle with very little wick – indicating strong sell-side momentum.

• Volume Spike:

  • This recent bar had the highest volume spike in the entire visible chart range (since 2020), which:

    • Indicates either panic selling or institutional liquidation.

    • The bar is large and closes near the low, confirming bearish continuation.

• Reversal Patterns / Signals:

  • No visible pin bar or doji preceding this drop – it was more of a clean breakdown, not a fakeout.

• Gap Down / Continuation:

  • The large red candle appears to be a breakaway bar after a distribution phase, indicating continuation rather than reversal.

---

🛑 3. Support & Resistance

• Support Levels:

  • Around 38,000 (being tested now).

  • Previous swing low at ~32,327 (Sept 2023).

  • Strong support at 29,653 and 28,660 (2022 lows).

• Resistance Levels:

  • 40,000–41,000 now acts as immediate resistance.

  • Strong resistance at 45,073 (ATH zone).

• Price has sliced through previous support near 40,000 like butter, showing no buyer defense.

---

⚔️ 4. Breakout & Pullback Analysis

• Breakout:

  • This is a strong downside breakout.

  • The large red candle and volume confirmation suggest institutional-level participation.

• Pullback:

  • Prior to this drop, we had a pullback (lower high) around 43,500 before the plunge.

  • The prior pullback didn't recover previous highs, indicating supply outweighs demand.

---

🌐 5. Market Context & Trading Bias

• Context: Bearish Reversal Phase

• Psychology:

  • Greed phase peaked at ATH → indecision with overlapping bars → now clearly in fear phase with panic selling.

• Bias:

  • Currently bearish unless price can reclaim the 40,000 zone with strong bullish confirmation.

---

💰 6. Supply, Demand & Liquidity Analysis

• Supply Zone: 43,000–45,000 (recent distribution before selloff)

• Demand Zone: 32,000–34,000 (historically supported rebounds)

• Volume & Liquidity Trap:

  • The big red bar may cause a bull trap liquidation, flushing out late bulls.

  • Watch for liquidity sweep around 38,000–36,000 for potential short-term bounces.

---

🛡️ 7. Risk Management Strategy (Hypothetical)

• Potential Entry (Short): After weak bounce toward 40,000–40,500.

• Stop Loss: Above 41,000 (invalidates short thesis).

• Target: 34,000 / 32,000 zones for short continuation.

• Reversal Buy Setup: Only if price holds above 38,000 and forms a bullish pin bar or engulfing candle with strong volume.

---

🔮 Final Take

The DJI has officially entered a correction phase with high volume and a violent break below support. Expect volatility to rise, and watch closely how price behaves around the 38k level — this is now the battleground between bulls and bears.