DIA – Daily Chart Ending April 21, 2009

I charted Dow Jones ETF DIA’s daily OHLC price changes from March 5, 2009 through April 21, 2009 after it closed at $79.59.  (I started on 3/5 because that’s where the longest trend line I like started and I wanted to include as much detail as possible.)

• DIA broke below its trend line (A) of higher lows on Monday and confirmed the break on Tuesday by staying beneath it
• The horizontal line (B) that acted a ceiling for resistance and then a floor for support met with its declining trend line (C) of lower lows this morning – both held support at the same point this morning and pushed DIA higher
• The trend line (D) of slightly higher highs is the higher level of resistance, not much above $82.00, allowing an average of ~$0.10 per day in new highs for DIA
• DIA hit resistance at its 10 day moving average this afternoon and stopped its advance
• The 20 day moving average broke on Monday and again on Tuesday morning, but recovered before closing the day
• Williams %R broke below oversold on Monday signally a bearish move, but didn’t get confirmation on Tuesday as DIA regained some momentum

Opinion = Trend line B is a big one to watch.  If/when it breaks the next stop might be 75.00 at the 50 day moving average.  Below that will require another chart to be more accurate, but could easily head back to 70.00 or another retest of 65.00.  With the volume being light for the past few weeks I see it as something big is coming.  The down side might offer the path of least resistance after the quick and sharp rally we’ve just had over the past six weeks.