Once an area or “zone” of prior resistance has been identified, those price levels can serve as potential entry or exit points because, as the price reaches a point of previous support or resistance, it will do one of two things: bounce back away from the support or resistance level, or violate the price level and continue its trend until it hits the next support or resistance level.
As most other major market indices are at 200-day SMA support we are taking a short position in DIA at the prior months' resistance zone.