The broader trend of the index remains positive, as it is marked by the tentative upside support line drawn from the low of Jan. 31. That said, before we start aiming higher, we would like to see investors overcoming the 34500 barrier.
If they manage to do so, we could see the index hitting once again its record high of 35092, achieved on May 10. A break higher will confirm a higher high on the larger time frames and take the Dow into uncharted territory.
However, before the next leg north, market participants may allow a pullback, perhaps towards the 34120 area, marked by an intraday swing low formed on May 21.
Shifting attention to our short-term oscillators, we see that the RSI shows signs of topping slightly below 70, while the MACD, although above both its zero and trigger lines, shows signs of topping as well. This shows decelerating upside momentum and strengthens the case of a possible setback before the next leg north, perhaps near the 34120 area.
Nonetheless, in order to start examining the case of a deeper downside correction, we would like to see a clear dip below 33930. This may encourage declines towards the low of May 19, at 33475, or the low of May 13, at 33285.
If neither level is able to halt the slide, the bears may then target the aforementioned upside line taken from the low of Jan. 31, or the 32970 area, defined as a support by the lows of Mar. 30 and Apr. 1.