Dow Jones Index Falls Below 200-Day Moving Average As Selling Pressure Mounts: What's Next For The Blue Chips?

The Dow Jones Industrial Average slipped in the March 28 session as selling pressure intensified, pushing the index narrowly below the support of the 200-day moving average located at 32,356 points.

Over the past two weeks, the Dow has battled fiercely up and down with the 200-dma, which represents a significant technical milestone where traders are concentrating their attention to gauge the index's future moves.

Dow Jones Industrial Average (DJI) 1-day – Chart: TradingView

What’s Moving The Dow?

The Dow's negative daily performance was mostly dragged down by its heavyweights such as UnitedHealth Group Incorporated UNH, which fell 1.6%, Microsoft Corp MSFT, which fell 1.4%, and American Express Corporation AXP, which fell 2.5%.

In contrast, Boeing Company BA and Chevron Corporation CVX offered some positive contribution to the Dow's overall performance.

DJIA movers on March 28 – Chart: TradingView

Technical Analysis: What’s Next For DIA?

The SPDR Dow Jones Industrial Average ETF Trust DIA is the most popular exchange traded fund tracking the performance of the Dow Jones Industrial Average, by using a full replication technique.

Looking at the daily chart, the short-term trend pendulum seems to be swinging to the sellers' side, as the 14-day relative-strength index (RSI), a key momentum indicator, has not broken above the 50 mark since mid-February.

DIA has currently retraced about 40% of the October-December 2022 low-to-high range.

If the DIA successfully breaks below the 200-dma support, the next critical technical support level would be between $315 (March 15 low) and $317.40 (50% Fibonacci retracement and November 2022).

This region might be tested in the coming days, if the overall risk sentiment remains fragile. Should sellers prevail there, a drop to $310 (61.8% Fibonacci retracement) would then be likely.