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Divergence between DJI & DJT

11 Jul 2021 ‚óŹ 05:05 AM

Dow Jones Industrial (DJI) completed its a-b-c decline and has broken above the five-wave rise in Friday's trading session. Not only that, it broke out from the channel, it re-tested the breakout point, and now it is possibly resuming its uptrend. DJI can possibly rise higher towards 35745 in the forthcoming trading sessions in wave III if it holds the support near the swing low of 34145.

However, many people on the street are worried about the divergence between Dow Jones Industrial (DJI) and Dow Jones Transportation (DJT). The wave structure of DJT is suggesting that one more leg of up move in the form of Wave V is still pending medium term. This possibly means that the divergence between DJI and DJT can have a positive impact on DJT and it should pick up the pace from here on. Also, positive divergence is visible on the daily momentum indicator and it has turned bullish in Friday's trading session. It has multiple hurdles in the zone of 14950 - 15065 and once DJT breaks and sustains above this resistance zone, the momentum should pick as it catches up with the DJI on the upside.

 

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