Facts
- U.S. indices started the new year with gains, but the DJIA remains the strongest performer. As of January 8, it is up 1.85%, compared with 0.5% for the Nasdaq 100 and 0.62% for the S&P 500.
- Following the downside impulse on January 7, the hourly RSI for US30 dropped to 23.5, suggesting the index has entered oversold territory.
- On January 8 at 14:07, the US30 index found support at the 200-period exponential moving average (EMA200) on the hourly chart.
- Weakness in Caterpillar, Honeywell, and Nike contributed to the index decline. However, pre-market trading ahead of the January 8 Wall Street session shows losses in the industrial giants Caterpillar and Honeywell stabilizing.
Recommendation
Long position on US30 at market price
- Take profit: 49,600
- Stop loss: 48,300
Opinion
The bull market in U.S. assets may still have room to continue, and without a rising DJIA, which represents the largest U.S. companies whose earnings are primarily tied to the domestic U.S. economy, it is hard to see this trend as sustainable.
Expectations of potential Fed rate cuts in 2026, downward pressure on yields, and the solid dividend policies of DJIA constituents may continue to support “buy-the-dip” behavior. The scale of the recent pullback, combined with a supportive catalyst in the form of recent macro releases that reinforce the scenario of rate cuts alongside a resilient U.S. economy in 2026, could help drive a rebound. Lower oil prices on global markets may also support a recovery in equities.
We recommend opening a long position in US30, with a target at 49,600 points and a stop-loss at 48,300 points, defined by the local low from early 2026.
Source: xStation5
