Interval: Daily

The Americans got back their optimism in the past weeks, we can see this in the uptrend on the Dow Jones Industrial, one of the most important indexes from United States. This growth is also sustained by the economic data from USA, for example we can take the ISM Manufacturing PMI which was published for the third month over expectations and in the positive territory.

Getting back to the chart we will observe a price pattern formation called Broadening Formation (known also as Megaphone Top). If this, in the past was a reversal pattern, nowadays it is considered as a congestion area which might signal a continuation of the trend, not only a reversal.

If the price will break over the latest top at 14148 (preferably closing over it also, to avoid a false breakout) then the target will be 14460, just over the 161.8 expansion of the last important correction. On the other hand, if the price will fall back to the lower part of the pattern, we should wait for a down break to target 13600 and 13400.

Price action is everything when using price patterns, don’t forget to look for confirmations and also keep an eye on the site for updates on DJI.