Since the beginning of the year the US index gained almost 6.5% and last week alone rose over 1.0% in addition the US index is in a bullish phase since mid-May.
Last week the index rallied with a narrow range and closed near the high of the week, in addition managed to close above the previous week high, which suggests a strong bullish momentum.
The stochastic is showing crossed below the overbought zone and is now displaying lack of momentum although is still above the 50 mid line.
Dow Jones Industrial Average is holding above the 10-week moving average that now should provide a good dynamic support for next week.
Expecting a downward move to a key level at 20,500 (scenario 1) on a bounce from the Fibonacci extension at 21,420 however a break below the 10-week moving average at 20,722 may trigger a profit taking thus pushing the index down to a Fibonacci extension at 20,121 (scenario 2).