Current trend

The Dow Jones Index is correcting in a local upward trend at 42870.0, consolidating amid expectations of a new reduction in borrowing costs.

The reporting season kicked off last week, with GE Aerospace, Verizon Communications Inc. and RTX Corp. all set to report their financial results today. Jet engine supplier GE Aerospace is expected to report revenue of 9.05 billion dollars in its aviation unit, up from 8.22 billion dollars in the previous quarter, while earnings per share could fall to 1.14 dollars from 1.20 dollars in the prior quarter. The revenue of telecom company Verizon Communications Inc. is likely to be 33.44 billion dollars, up from 32.8 billion dollars in the previous quarter, and earnings per share could rise to 1.18 dollars from 1.15 dollars. Meanwhile, aerospace and defense company RTX Corp. is set to report revenue of 19.84 billion dollars, up from 19.80 billion dollars in the prior-year period, while earnings per share could reach 1.34 dollars, down slightly from 1.41 dollars previously reported.

The possible new reduction in the interest rate is offset by the growth in bond yields: the rate on 10-year debt securities increased to 4.223% from 4.114%, on 20-year securities — to 4.581% from 4.459%, and on 30-year securities — to 4.523% from 4.397%.

The growth leaders in the index are Boeing Co. ( 3.11%), Apple Inc. ( 0.63%), UnitedHealth Group ( 0.33%).

Among the leaders of the decline are American Express Co. (–2.19%), Merck & Co. Inc. (–2.17%), The Travelers Companies Inc. (–2.17%).

Support and resistance

On the daily chart, the index quotes continue their corrective dynamics, still trying to stay above the resistance line of the ascending channel with boundaries of 42600.0–40000.0.

Technical indicators that hold the upward signal are gradually strengthening it: the range of EMA fluctuations on the Alligator indicator is expanding, and the AO histogram is forming new upward bars, being held above the transition level.

Support levels: 42550.0, 40870.0.

Resistance levels: 43310.0, 45000.0.

Trading tips

If growth continues, long positions that can be opened if the price overcomes the channel resistance at 43310.0 with a target at 45000.0 and stop-loss at 42900.0 will be relevant. Implementation time: 7 days and more.

If the asset reverses and continues declining, and the price consolidates below 42550.0, short positions can be opened with the target at 40870.0. Stop-loss — 43100.0.