Warrant of the day: DJI (L1EW and L1FW)

The Dow showed a couple of sessions of narrow range trading around crucial zone of support 9,950 before eventually resolving the congestion sharply to the upside on Wednesday. This bullish move above 10,160 lifted the market towards strong resistance around 10,300. Yesterday price advanced slightly further and managed to close above the 20-day ma and at the session high. The very short-term technicals are neutral. In case of a positive reaction to today’s important non-farm payroll data this rally might extend towards the 200-day ma at 10,451. A close above crucial zone of resistance 10,480/10,515 is needed to generate a mid-term buy signal and confirm a bullish wedge pattern triggered on July 23. Next solid support is seen at 10,160. A decisive close below key support 9,950 would trigger continuation and possibly acceleration of the valid short-term downtrend towards the July trough set at 9,614. Sustained violation of the latter level would confirm a major head and shoulders top.