Dow Seems To Have Topped Out Now At-17991.19---13-12-14

DOW JONES INDUSTRIAL AVG INDEX CLOSED AT 17280.80 ON 12.12-14

SUPPORT:-17278/17175/16923/ 16671 / 16389 / 16333.78 / 15855.12.  

                               

 RESISTANCE:- 17351 / 17488 / 17829 / 17895 / 17991.19.

(Figures in bold are important)

The Dow first made a top at 17350.64 on 19-9-14 and then went down sharply breaking and going far below all its short and long term moving averages in the process and made a low of 15855.12 on 15-10-14 and thereafter made a V shape recovery in 36 trading session or say in 8 weeks time and it made a new all time high at 17991.19 on 5-12-14 and then again started going down and closed at the lowest for the week ended on 12.-12.14. It is important to mention here that in just concluded week it has wiped off 5 week’s gain out of 8 week’s rise which is alarming and clearly indicate that the impulse up move may be over and the top of 17991.19 may not be crossed for a  reasonable time period  and Dow may retrace the entire up- move of 15855—17991.19 in coming days, however in between short pull back up move could be there and in the pull -back it is not expected to go beyond 17650 level. The on-going correction could be significant and painful too and may last couple of week’s.

  The possible points where it can make bottom are 17175 / 16923 / 16671 / 16389, if it does not make bottom in the range of16400--16300 and stays below this range then it could possibly retrace the entire up-move it made from 15855.12---17991.19,chances of which are looking reasonably good. Kindly note that if it retraces the entire up-move and in the same time period then it could make a bottom in the range of 15855--15750 and possibly by the end of January-2015. It is important to mention here that the broad range of long term moving averages of Dow is between 17116---16765 and if it breaks 17116 level and stays then it will be the first threat to the long term trend and if it breaks 16765 mark and consistently starts trading below this then it could be the potential sign of beginning of a bear market. Therefore I strongly feel that if the up-trend has to stay then it cannot remain below this range for long time and if it does then it will be a matter of concern, so watch out 

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REMARK:-  :- Long term trend is still intact. Since it is in correction mode I would suggest trader to avoid fresh long call completely till it gives visible indication of correction completion. Instead try short call on the rise at appropriate level with adequate stop loss,

 Kindly note that make your cost your stop loss in favorable  trade and then trail it as the price move up/down to gain maximum profit and avoid losses. Use support and resistance levels as entry, exit, target and trailing stop loss points. DO NOT TRADE WITHOUT STOP LOSS.

Disclaimer:-The view expressed here are solely of the author and he is not at all responsible in any way for the outcome of the trade you enter based on the above view.

Note: Price stated here is of spot market

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