January Monthly Performance Predictions
What to Expect
With the first trading day of January starting tomorrow, let us take a look at how the month is setting up.
As we will always do, the first thing to be reviewed will be the Candlestick portion of the Monthly chart. We will look at how the 4 white and pink horizontal Support and Resistance Lines were established and the best way to utilize these prices as the month progresses.
From there, we will look at the additional indicators below the chart to see what the momentum looks like with the MACD and RSI line graphs.
There will be only minimal mention of the Moving Averages; however, those will come into discussion more during the Daily Chart breakdowns.
Top Half Analysis
With the Dow Jones trading at all times high during the month of December 2021, there are no historical resistance lines that can be created.
So, the best option is to utilize the information available to help predict where the resistance may be.
To do this, we start with establishing 3 basic support and resistance lines based on the December 2021 candle. Using the top, middle, and bottom of the candle, we were able to establish price points of $36,338.30, $35,508.62, and $34,678.94 respectfully.
To try and guess where the high of the month may potentially hit, an imaginary resistance is created at $37,164.98 in pink - keeping the spacing consistent with the historically established stablish price points in white.
The only Moving Average in site during this 6 month view is the green 8 Moving Average line. It seems the Dow Jones has been hovering around the 8 Moving Average for the last four months - dropping lower than the 8 Moving Average during November and September as well. Ideally we push upward and away from the 8 Moving average during January’s candle.
Overall, the Top Half technical analysis of the Dow Jones has been positive. Let us see if this carries over to the Bottom Half technical analysis as we look at the momentum indicators
Bottom Half Analysis
Starting with the MACD, it is comforting to see the Green line so far above the Red line.
It does seem; however, that the peak of the green line may be starting to bend in a downward direction. It is very hard to tell at this point; however, at least it does not look like the Red line is in a sharp incline up either.
Keeping the positivity, it seems the RSI is also fairly positive.
It is comforting to see the Green line over the Red line, and it seems there is some separation starting. It should be noted that the RSI is a little too high for comfort - sitting at 79.20. Generally, anything over 80 is considered overbought and a desire to cool off would be expected.
Final Thoughts and Targets
Overall, there was a lot of positive in this monthly chart for the S&P-500.
With last month trading at all time highs and our momentum indicators seemingly positive, it seems January should be a fairly good month.
Final price range of $36,600.00 - $36,000.00 would be ideal and set up February to keep the run going.
