US 30 Retracement Imminent as Market Becomes Overbought

Market Analysis – May 16

US 30 marked experienced a short-lived downward trend in March. The market has resumed its ascent towards the previous high of 39986.0. The possibility of a pullback to 39017.0 is high as the Stochastic signals an overbought market.

US 30 Key Levels

Demand Levels: 39017.0, 38560.0, 37238.0
Supply Levels: 39986.0, 40000.0, 41000.0

US 30 Long-term trend: Bullish

The market signaled an impending downturn in price with a divergence in April. The double-top bearish reversal pattern at 39986.0 featured a higher high. At the same time, the Stochastic which was in the overbought region revealed a lower high to signal weakness. The result was obvious as the price crashed afterward.

The dip in the price of US 30 in April fulfilled the role of mitigating the bullish order block at the demand level of 37238.0. After a failed attempt to rise past the resistance 38560.0 in April, the buyers enforced a successful breakout this month. The Williams Alligator currently signals a bullish stance in the market.

US 30 Short-term trend: Bullish

The 4-hour chart signals an overbought market. This is also in correlation with the daily time frame. A pullback is therefore Imminent. At the demand zone of 39017.0, a bullish order block rests in a fair value gap visible on the 4-hour chart. The price will retrace to the high probability order block before continuing its ascent.

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