Dow rebound echoes July's bullish setupWall Street CFDFOREXCOM:US30FOREXcomAfter a big leg lower on Thursday, the Dow reversed sharply on Friday, bouncing from just above the 50-day moving average and the uptrend running from the April 30 low. The move itself came after a failed break beneath 52,800, a level that has repeatedly acted as both support and resistance over the past several months. Rather than the bounce itself, what piqued my interest was how closely the price action mirrored what happened in late July. Back then, a similar test of the 50-day moving average and rising trendline sparked a sharp reversal that eventually carried the index to a record high of 54,747. That puts 53,247 in focus today, the low set on Wednesday prior to Thursday’s leg lower. The price has recovered the level in Asian trade, and should it continue to hold above it, I think there is enough in Friday’s reversal to consider a potential long setup. Longs could be set with a tight stop beneath 53,247 for protection, targeting a move back towards the record high at 54,747. The 54,000 area is worth watching along the way given the price repeatedly failed there earlier this month. The main caveat on the setup comes from the oscillators. RSI (14) continues to trend back towards the neutral 50 level, suggesting upside momentum has faded from earlier in the month, while MACD has staged a bearish crossover and is also moving back towards zero. It's not an outright bearish signal but it's hardly bullish, either. Even so, with the broader uptrend intact, the price action remains constructive while 53,247 holds. Of course, a sustained break back below 53,247 would invalidate the bullish setup. Good luck! DS