DJU Dow Jones Utility Average Analysis March 2016 (W,M,Q)
Created on Thursday, 24 March 2016 06:22
Written by Austin Galt
The Dow Jones Utility Average (DJU) is a stock index that keeps track of 15 prominent utility companies. Price last traded at $658.83.
Let’s take a top down approach beginning with the quarterly chart.
DJU QUARTERLY CHART
Anyone see a bear market currently in play? Not me. On the contrary, price is setting new record highs. The long term bull market remains steady and sure.
The horizontal line denotes the 2008 high and the recent low was right around support from the level. There isn’t a better example of old tops often providing support in the future.
The Bollinger Bands show the recent low was just above the middle band and price is now already back up at the middle band. Price may encounter some small resistance at the first time back but should then swoop higher as it clings to the upper band.
I have drawn a Fibonacci Fan from the 2002 low to 2008 high. It shows the majority of the bull market crawled up along the 61.8% angle before launching up to the 50% angle which has been providing some resistance. I now favour price moving even higher and the only question I have is does price now crawl along the 50% angle or explode even higher up to the 38.2% angle.
Time will tell.
The RSI is looking reasonably strong while the MACD indicator is back in bullish mode.
DJU MONTHLY CHART
The horizontal line denotes the previous swing low which was not breached so the overall bull trend remains intact.
I have drawn a Fibonacci Fan from the 2009 low to first new swing high and it shows the bull market being contained within the 61.8% and 76.4% angles. The 2015 high was right around resistance from the 61.8% angle while the subsequent low was around support from the 61.8% angle. Nice.
The Bollinger Bands show the recent low was at support from the lower band and price is already back up at the upper band. I believe some further consolidation is needed before the uptrend really gets going again and hence I am looking for a move back to around the middle band to put in another higher low. The middle band is currently around 588.
The RSI is looking strong while the MACD indicator is bullish.
DJU WEEKLY CHART
The Bollinger Bands show the recent move higher climbing higher along the upper band. I expect a correction imminently and will be looking for the higher low to be back at the lower band.
I have drawn two Fibonacci Fans. Let’s run through them both.
The bearish fan drawn from the 2015 high shows the 2015 low at support from the 76.4% angle while reactions higher were held by resistance from the 88.6% angle. This resistance eventually gave way which ultimately led to new price highs.
The Bullish fan drawn from the 2015 low shows the first higher low dipped marginally below the 88.6% angle and it is this angle where I suspect the next major higher low will form. Let’s see.
The RSI is looking very strong while the MACD is looking very bullish. Both indicator look in need of a break and a correction shortly will provide just that.
So, everything looks decidedly bullish for the Dow Jones Utility Average.