Watch These SPDR Dow Jones Industrial Average ETF Price Levels After Record Close

Key Takeaways

• The SPDR Dow Jones Industrial Average ETF Trust may come into focus on Monday after posting a record close Friday following a strong September jobs report that reinforced confidence in the economy’s resilience.
• The fund's price trades within an ascending channel, though lackluster volumes potentially indicate waning upward momentum.
• Investors should monitor crucial support levels on the ETF's chart around $377, $350, and $325, while also watching a measured move price target above the ascending channel at $483.

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.

Ascending Channel in Play

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.

Crucial Support Levels

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.

Key Bullish Price Target

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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As of the date this article was written, the author does not own any of the above securities.

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