Dow Plunges 6.77% in Two Days as Bearish Signals Intensify Below $29 Support

Dow (DOW) declined 3.19% in the most recent session, extending its losing streak to two days with a cumulative 6.77% drop, closing at $28.50 amid heightened selling pressure. This sharp downturn forms the immediate backdrop for our technical assessment.
Candlestick Theory
Recent price action reveals bearish confirmation signals. The latest session printed a long-bodied red candle breaking below the $29.00 psychological support, following a similar bearish candle in the prior session. These consecutive red candles with minimal lower wicks suggest persistent selling momentum. Key support now resides near the $27.50 level—December 2024’s consolidation zone—while resistance firms around $29.90, the convergence point of May 2025’s false breakout highs and the current breakdown level.
Moving Average Theory
The 50-day MA ($32.15), 100-day MA ($34.80), and 200-day MA ($39.20) illustrate a deteriorating long-term structure. Current price trades substantially below all three averages, with the 50-day crossing bearishly below both longer-term averages in March 2025—a confirmed "death cross." The widening gap between shorter and longer-term MAs underscores entrenched bearish momentum. Any recovery would face immediate resistance near the descending 50-day MA.
MACD & KDJ Indicators
MACD histogram readings remain deep in negative territory (-1.25), with the signal line maintaining a steep downside divergence since early June. Simultaneously, KDJ oscillators (K: 18, D: 22, J: 10) reflect oversold extremes below 20. However, both indicators lack bullish divergence signals, suggesting oversold conditions have not yet translated into reversal momentum. The MACD’s failure to arrest its downward trajectory despite extreme KDJ readings creates a bearish divergence, indicating unresolved downward pressure.
Bollinger Bands
A pronounced volatility expansion occurred as prices breached the lower band ($29.20) on June 17-18, triggering the 6.77% two-day collapse. The bands are widening after the mid-June squeeze near $30.00, confirming strong directional momentum to the downside. Price rejection from the lower band would require stabilization above $28.30 to signal potential exhaustion, but no such recovery has materialized.
Volume-Price Relationship
Downside volume validation is evident, with the June 18 sell-off occurring on 10.1 million shares—20% above the 30-day average—confirming bearish conviction. Conversely, the June 10 rally to $30.70 on elevated volume (11.0 million shares) was entirely erased within six sessions, demonstrating weak accumulation. Sustained closes below $29.00 on above-average volume reinforce the breakdown’s credibility.
Relative Strength Index
The 14-day RSI (26.8) resides deeply in oversold territory, below the 30 threshold. While this typically flags potential exhaustion, similar oversold readings in April 2025 preceded only temporary bounces before new lows. RSI’s downward slope since its June 10 peak (58) aligns with price degradation, offering no bullish divergence. Historical instances caution that RSI can remain oversold during strong downtrends, as seen in Q4 2024.
Fibonacci Retracement
Using the April 9, 2025 peak ($29.86) and December 20, 2024 trough ($37.38) as anchor points, Fibonacci levels highlight critical areas. The recent breakdown occurred below the 61.8% retracement ($29.00). Next support clusters at the 78.6% level ($27.70), aligning with the December 2024 consolidation base. The 50% retracement ($31.30) now acts as robust overhead resistance.
Confluence and Divergence Summary
Multiple indicators converge at $27.50–$27.70 support (December 2024 price base, 78.6% Fibonacci, and long-term volume profile). However, a notable bearish divergence exists between oversold oscillators (RSI, KDJ) and unresolved downward momentum (MACD, moving averages). Until price reclaims the $29.00–$29.90 resistance confluence, the technical structure favors continuation of the downtrend. A close below $27.50 may accelerate selling toward the $25.80 yearly low, while stabilization above $28.80 could signal a technical relief rally.