|Checking the Dow's monthly chart, two possibilities stand out. It can either hold here at the 7400-7466 range or move towards and possibly test the major support level at the 200-month EMA . This would be in the 6400 area.|
|Note the displayed indicators are in oversold territory. Of peculiar interest is the CCI (commodity channel index), a momentum type oscillator used to help identify price reversals, price extremes and trend strength, which actually shows positive divergence as it fails to make new lows with the Dow. This may turn out to be a telling clue for a coming rally and traders should look for more confirming indicators going forward.|
|Graphic provided by: stockcharts.com.|
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