The Dow Jones Industrial Average, S&P 500 and the NASDAQ Composite index have risen well last week. The Dow Jones surged over 3 per cent. The S&P 500 and the NASDAQ Composite were up over a per cent each. On the charts, the bias is positive. It looks like everything is set for a Santa Claus rally.
Dow Jones (48,710.97)
The rise and close above the intermediate resistance level of 48,400 keeps the bullish bias intact. The upside is open to test 49,200 and 49,500 in the coming weeks. The upside can extend even to 50,000 in the medium term.
The region between 50,000 and 50,500 is a strong resistance zone. We can expect the upmove to halt there. A corrective fall to 49,500 and even lower is possible thereafter.
Cluster of supports are there in the 48,000-47,500 region. The Dow Jones has to break 47,500 in order to turn bearish.
S&P 500 (6,929.95)
The bullish breakout above 6,910 happened last week. A strong follow-through rise from here can take the S&P 500 index up to 7,000-7,100 in the coming weeks. Such a rise will also confirm the inverted head and shoulder pattern on the chart. That in turn will have the potential to take the S&P 500 index higher to 7,300-7,350 in the coming months.
The region around 6,900 will now be a crucial support to watch this week. The aforementioned bullish view will get negated if the index falls back below 6,900. If that happens, a fall to 6,850-6,800 can be seen again.
On the charts, the price action is looking strong. So, we expect the S&P 500 index to sustain above 6,900 and rise further.
NASDAQ Composite (23,593.10)
The NASDAQ Composite index got a good follow-through rise last week. Crucial resistance is in the 23,750-23,800 region. Above that, 24,000 is the next important resistance.
The index has to breach 24,000 decisively in order to turn the sentiment positive convincingly. A strong rise above 24,000 will also confirm a bullish inverted head and shoulder pattern on the chart. It will then open the doors for a fresh rally to 25,000 and even 26,000 in the coming months.
But a failure to breach 24,000 and a downward reversal from the 23,800-24,000 region will keep the index under pressure. In that case, the NASDAQ Composite index can fall back to 23,500-23,000 again.
Dollar outlook
The dollar index (97.65) continues to remain under pressure. The index is facing strong resistance at 98.35 over the last two weeks. That keeps the bias negative for the index. A fall to 97 looks likely now.
The price action on the charts leaves the index vulnerable to break below 97 as well. Such a break can drag the dollar index down to 96-95.80 in the coming weeks.
Cluster of resistances are between 98 and 99. The dollar index has to surpass 99 to bring back the bullishness of revisiting 100 and higher levels. But such a rise looks less likely.
Treasury Yields
The US 10Yr Treasury Yield (4.13 per cent) oscillated between 4.1 per cent and 4.2 per cent for the third consecutive week. That continues to keep the near-term picture unclear. As such, there is no major change in the outlook for now. We will have to wait for a breakout on either side of the 4.1-4.2 range.
A break above 4.2 per cent will be bullish. It can take the US 10Yr Treasury Yield higher towards 4.3-4.35 per cent thereafter.
On the other hand, if the yield declines below 4.1 per cent, it can fall to 4 per cent and even 3.95-3.9 per cent.
From a long-term perspective, 3.9 per cent is a strong support for the US 10Yr Yield. So, there is a good chance for the yield to reverse higher from this support and rise back above 4 per cent eventually.
So, even if the yield declines below 4.1 per cent down, the downside can be limited to 3.95-3.9 per cent.
Published on December 27, 2025