Materials companies are some of the most economically sensitive names in the market. Events like social lockdowns, mass job losses and nosediving GDP have all kinds of knock-on effects for their business. The sector was already struggling before coronavirus, and fell even more sharply as the disease spread.
DOW
is one of the most actively traded names in the space, and is also the only
DJI
member.
It bounced hard last week as the S&P 500 had its biggest weekly gain since 1974. But that rally has brought DOW back to its 50-day moving average and the high-volume bearish gap from March 9. Stochastics are also suggesting an overbought condition.
Even if the worst of coronavirus has passed, this is a significant bounce for DOW and an area where traders may look to take profits. Based on the technicals alone, a retest of $31, or even $27, may be in the cards for DOW.
DOW
is one of the most actively traded names in the space, and is also the only
DJI
member. It bounced hard last week as the S&P 500 had its biggest weekly gain since 1974. But that rally has brought DOW back to its 50-day moving average and the high-volume bearish gap from March 9. Stochastics are also suggesting an overbought condition.
Even if the worst of coronavirus has passed, this is a significant bounce for DOW and an area where traders may look to take profits. Based on the technicals alone, a retest of $31, or even $27, may be in the cards for DOW.