Things seem to be looking better for the DJIA.  Not only has it stayed above the 50 and 100-day Moving Averages, but it is nearing the 200-day Moving Average at 8996.

Despite this, the general trend of the index remains sideways since October 2008.  Is it gearing itself for a reversal?  Maybe, maybe not.  Until the signs are clearer, it’s very hard to call it.

What we should be watching is the bullish divergence created by the MACD since October 2008.  As we can see, the lowest points in both October 2008 and March 2009 show that we have higher lows while the index was making lower lows.  This could be an early warning for us that the trend could be reversing soon.  However, it’s not a 100% guarantee.

A little more patience is required.  However, we could probably start accumulating some selected shares.

Recommendation: Buy selectively
Resistance: 8996