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Test for Dow Industrials at 10,325

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Our retracement bracket on the Dow Industrials at 10,325 could well be the technical resistance that this widely watched market average is going to have to break for a sign that bulls continue to get aggressive on the buy side of things. Some signs from General Electric (NYSE:GE) give hint that this stock could still be key for how things pan out near-term.

Dow Industrials Chart - Daily Interval

The Dow Industrials action and have a large impact on investor psychology. Yesterday's open found selling near retracement resistance and still seeing some selling today. Traders and investors will now be looking for some near-term support at the 200-day MA near 10,095. One stock that may impact things near- term is General Electric (NYSE:GE) and what is taking place at its 50-day moving average.

General Electric Chart - Daily Interval

Shares of General Electric (NYSE:GE) came right down to their 50- day MA yesterday and have tried to bounce this morning. This may be a good stock to keep an eye on near-term and correlate against the Dow Industrials. A break back below the $39 level would be considered bearish. Subscriber's looking for a stock to short/put may want to consider shares of GE, with a stop just above the $42 level. MACD on the daily interval is rolling over and has crossed back below the signal, but still above the zero level. Any move above recent resistance of $42 could have the Dow Industrials breaking above the 10,325 level. Right now though, shares of GE look slightly bearish. Should GE break back below the 39 level, that could put further pressure on the Dow Industrials and make it difficult for bulls to get enough conviction for a Dow Industrials move above the 10,325 level. This may also dampen broader market bull enthusiasm near-term.

Jeff Bailey
Senior Market Technician
Option Investor

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