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Watch These SPDR Dow Jones Industrial Average ETF Price Levels After Record Close
~2.0 mins read
The SPDR Dow Jones Industrial Average ETF Trust (DIA) may come into focus on Monday after posting a record close Friday following a strong September jobs report that reinforced investor confidence in the strength of the economy.
While the upbeat jobs report eases concerns about a softening labor market and reinforces the economy’s resilience, it could also put the brakes on more aggressive interest rate cuts by the Federal Reserve. The ETF, which closely tracks the performance of the Dow Jones Industrial Average (DJIA), notched its fifth consecutive higher month in September, boosted in part by expectations the Fed will continue to cut rates aggressively after easing policy for the first time in four years last month.
The ETF gained 0.8% to close at $423.41 on Friday, as the Dow finished at a record closing high.
Below, we take a closer look at the fund’s technicals on the weekly chart and identify key price levels worth watching out for.
Since bottoming out just below the 200-week moving average (MA) in September 2022, the DIA fund has trended steadily higher in an ascending channel, with the ETF’s price testing the pattern’s upper trendline on several occasions since March this year.
However, during the move higher, volumes have remained lackluster, potentially indicating waning upward momentum. Moreover, as the fund has made higher highs, the relative strength index (RSI) has formed several lower highs, pointing to a bearish divergence between the price and indicator.
Let’s take a look at several crucial support areas on the ETF’s chart while also using technical analysis to forecast a potential price target above the descending channel’s upper trendline.
During retracements, investors should initially eye the $377 level, a location on the chart where the fund’s price may find support near a period of early January consolidation and the April swing low.
A breakdown below this level could see a decline to around $350, currently just above 200-week MA, where the ETF may attract buying interest from a trendline connecting an array of comparable trading levels from May 2021 to November last year.
Further selling could lead to a retest of lower support near $325, where the ETF may encounter support from a horizontal line linking multiple troughs on the chart between February 2022 and October 2023.
To forecast a price target above the ascending channel, we can use a measured move, also referred to by technical analysts as the measuring principle.
We do this by calculating the distance between the channel’s two trendlines and add that amount to the pattern's top trendline. In this case, we add $60 to $423, which projects a target of $483.
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Here's Why A Handful Of Pharmaceutical Stocks Rose Wednesday
~1.2 mins read
Shares of several drugmakers and biotechnology firms moved higher on Wednesday, notching some of the day's top performances in the S&P 500.
Various regulatory decisions and clinical trial results boosted the top-performing pharmaceutical stocks: Gilead Sciences (GILD), Bristol-Myers Squibb (BMY) and Vertex Pharmaceuticals (VRTX).
Shares of Gilead Sciences rose about 2%, extending a multiday string of gains that has followed the approval of Livdelzi, a treatment for inflammatory liver disease that received clearance from the Food and Drug Administration (FDA) on Aug. 14. Gilead has also drawn positive attention for its portfolio of HIV treatments.
Bristol-Myers Squibb (BMY) shares added close to 2% after competitor Neurocrine Biosciences (NBIX) released mixed results from a mid-stage clinical trial of its schizophrenia treatment. Although a low dose of Neurocrine's drug helped reduce the severity of schizophrenia symptoms, the study raised concerns about whether the benefits would carry over in larger trials. Bristol-Myers Squibb's schizophrenia treatment KarXT is set for an approval decision from the FDA in September.
Vertex Pharmaceuticals (VRTX) shares were up almost 2% after the company said the FDA approved its new drug application for suzetrigine, an oral treatment designed to alleviate moderate to severe pain. The drug has reportedly been granted a priority evaluation from the regulator, with a projected action date of Jan. 30.
While much of the market's attention has been focused on blockbuster weight-loss treatments from Eli Lilly (LLY) and Novo Nordisk (NVO), overall stock market returns in the industry have been relatively subdued this year. The SPDR S&P Pharmaceuticals ETF (XPH) is up around 7% in 2024, compared with gains of roughly 17% for the S&P 500.
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