The Dow Jones Industrial Average snapped its three-week rally last week. The index was down 0.67 per cent. The S&P 500 and the NASDAQ Composite indices on the other hand managed to recover their intraweek loss and closed the week in green. The indices were up 0.1 and 0.48 per cent respectively. On the charts, the Dow Jones continues to look positive. The S&P 500 and the NASDAQ Composite index have to get a strong follow-through rise from here to turn the sentiment positive.
Dow Jones (48,134.89)
Although the index fell last week, it is not getting strong sellers to drag it below 47,800. Strong support is in the 47,500-47,450 region. As long as the Dow stays above this support zone, the outlook will remain bullish.
Near-term resistance is around 48,400. A break above it can take the Dow Jones up to 49,500-50,000 in the coming weeks.
This bullish view will go wrong only if the index declines below 47,450. If that happens, a fall to 46,300-46,000. Such a fall looks less likely as the support in the 47,500-47,450 region looks very strong.
S&P 500 (6,834.49)
The fall to 6,720 happened last week in line with our expectation. The S&P 500 index touched a low of 6,720.43 and then bounce back recovering all the loss. This keeps the broader uptrend intact.
Resistance is in the 6,900-6,910 region. A rise to test this resistance from here will indicate a bullish inverted head and shoulder formation on the daily chart.
A decisive break above 6,910 will confirm the same. That will be very bullish and can take the S&P 500 index up to 7,100-7,200 going forward.
Important supports are at 6,700 and 6,650. The index will come under more pressure only if it declines below 6,650. Only then the danger of a fall to 6,500 will come into the picture.
NASDAQ Composite (23,307.62)
The index fell below 23,000 but did not sustain. It made a low of 22,692 and has risen back well above 23,000 again. If it manages to sustain above 23,000, a rise to 23,700-23,750 can be seen in a week or two.
Cluster of resistances are there in the 23,700-24,000 region. To get renewed strength, the NASDAQ Composite index has to breach 24,000 decisively. Only then the upside will open up for a rise to 25,000 going forward.
Failure to breach 23,750 from here can keep the danger alive of the index declining below 23,000 again. The level of 22,500 is a crucial support. The outlook will turn bearish if the index breaks below this support.
Dollar Outlook
The dollar index (98.72) has recovered well from the low of 97.87 last week. It is important now for the index to sustain above 98.50. If it does, then a rise to 99.00-99.20 or 99.60 can be seen from here. That in turn will reduce the danger of the fall to 97 that we had cautioned last week.
On the other hand, the bearish bias will come back into the picture again if the index declines below 98.50 from here. That in turn will still keep alive the danger of seeing 97 on the downside.
So, the price action in the early part of this week is going to be very important. A strong follow-through rise is very much needed from here.
Treasury Yield
The US 10Yr Treasury Yield (4.15 per cent) seems to be stuck in between 4.10 and 4.20 per cent over the last couple of weeks. That leaves the immediate outlook mixed and unclear. We will have to wait for a breakout on either side of this range to get clarity on the next leg of move.
A break above 4.2 per cent will be bullish. It will then clear the way for a rise to 4.3-4.35 per cent. On the other hand, a break below 4.1 per cent will be bearish for a fall to 4 – 3.95 per cent.
Published on December 20, 2025