Dow Jones forming a nice triangle pattern


Despite solid earnings, equity indices tumbled today, and the Dow was nearly half a percent lower ahead of the US session.

It looks like a nice triangle pattern, which could be a continuation formation in the long-term uptrend. However, traders might also use this triangle to take profits when the price drops below the lower line, which might cause a larger correction.

Thus, the support for the near-term seems to be at around 33,800 USD. If the index drops below that level, stop-losses of long positions will be liquidated, possibly pushing the index toward 33,680 USD, where another strong support is seen. 

Alternatively, if a rally reappears, the target could be in the 34,000 USD area. The next target should be at the current cycle highs, near 34,200 USD. 

The medium and long-term trends still appear bullish. However, the short-term seems overbought, possibly leading to a smaller correction. 
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