Dow Jumps 8.5% In Two Days As Bullish Signals Converge At 52-Week Low

Dow (DOW) rose 3.23% in the most recent session, closing at $28.73 and extending its two-day gain to 8.50%. This rebound follows a pullback to $26.38 on 2025-06-30, which marked a 52-week low. Below is a technical assessment integrating multiple analytical frameworks.
Candlestick Theory
Recent price action shows a "bullish engulfing" pattern formed on 2025-07-01 and 2025-07-02, where the second day's body fully eclipsed the prior day's decline, signaling strong buying momentum. Key resistance is established at the $30 psychological level (tested unsuccessfully in early May 2025), while support holds near $26.40, validated by the 2025-06-30 trough. The $28.73 close breached minor resistance at the June 27 high of $27.76, suggesting upward follow-through potential if volume persists.
Moving Average Theory
The 50-day SMA (≈$29.50) remains above the 100-day (≈$33.20) and 200-day (≈$37.80), confirming the long-term downtrend. However, the price recently rebounded from oversold territory well below all major averages. Consecutive closes above the 50-day SMA would signal a potential short-term trend reversal, though sustained bullish momentum would require overcoming the 100-day SMA, currently 16% above current levels.
MACD & KDJ Indicators
MACD shows a bullish crossover emerging on 2025-07-01, with the histogram transitioning from negative to positive territory. Meanwhile, KDJ exhibits an oversold rebound: The %K line (28) crossed above %D (22) from sub-20 levels on 2025-07-01. Both oscillators align in suggesting nascent upward momentum, though MACD’s position below the zero line underscores ongoing bearish macro conditions. Divergence is noted as price hit new lows in late June while KDJ formed a higher low, foreshadowing the current recovery.
Bollinger Bands
Bollinger Bandwidth contracted significantly in late June, signaling reduced volatility before the 8.5% two-day surge. Price has now risen from the lower band toward the 20-period midline ($27.60). The sharp expansion from contraction supports continuation of the breakout if volume persists. Sustained trading above the midline would reinforce bullish bias, while rejection near $29.50 (upper band) may trigger consolidation.
Volume-Price Relationship
The rebound was validated by rising volume: 21.4 million shares traded on 2025-07-01 (5.10% gain) versus 11.7 million on 2025-06-30 (1.93% decline). Volume on the two up days averaged 17.8 million shares—27% above the 3-month average—confirming institutional participation. This divergence from the prior downtrend’s high-volume selloffs (e.g., 19.8 million shares on 2025-04-09’s 15.69% drop) strengthens the reversal thesis.
Relative Strength Index (RSI)
14-day RSI rebounded from 26 (oversold) on 2025-06-30 to 48 by 2025-07-02, exiting the oversold zone but not yet reaching neutrality. While this indicates reduced downward pressure, the absence of overbought conditions (RSI >70) leaves room for additional upside. Traders should note that RSI may remain subdued during sharp trend reversals; sustained readings above 50 would bolster bullish confidence.
Fibonacci Retracement
Using the 2024-07-22 high ($54.42) and 2025-06-30 low ($26.38), key retracement levels are $35.40 (23.6%), $30.90 (38.2%), and $27.40 (61.8%). The recent rebound from $26.38 precisely respected the 61.8% support. Price now faces immediate resistance at the 50% level ($28.90), aligned with the June 23 close. Conquering this level opens a path to test $30.90 (38.2%), where the 100-day SMA and April 2025 swing highs converge.
Confluence and Probabilities
Convergence exists at $26.40–$26.80 (candlestick support, Fibonacci 61.8%, and 52-week low). Similarly, $28.90–$30.00 offers critical resistance (50% Fibonacci, June 2025 consolidation highs, and psychological barrier). Bullish alignments include MACD/KDJ crossovers, volume-backed price gains, and RSI recovery. Bearish undertones persist via the Moving Average structure and Bollinger Band midline resistance. Probability favors continued near-term upside toward $30, though rejection near this level may trigger retest of $27 support. Medium-term trend confirmation would require a close above $31 to flip the 100-day SMA.