DOW JONES INDUSTRIAL AVG INDEX- A TECHNICAL UPDATE-19-6-2016

DOW JONES INDUSTRIAL AVG INDEX-

CLOSED AT 17675.16 ON -17-6-2016.

                                                                           

SUPPORT:-17580.38/17484.23/17471.29/17425.03/17405.48/17399.01/17331.07/17210.43/17124.31/16821.86/16510.40/16165.86/15979.95/15942.37/15803/15503/15450.56/15370.33/15340.69/14760/14719.43/14681/14551.27/14444.03.

RESISTANCE:- 17762.96/17796.76/17899.24/17914.34/17977.85/18016/18167.63/18188.81/18351.36(all time high).

(Figures in bold are important)

The overall technical setup looks good but it has been correcting for last few days and this may continue for some time if it fails to hold 17471.29 level as of now.

Please note that it made its all time high on 19-5-2015 at 18351.36 thereafter it came several times near to it but could not cross it and in fact made lower top all the time and then went down for correction which is concerning. It could be consolidation or distribution but its behavior indicate that it could possibly be distribution at the higher levels because it would not have taken so long time to cross the all time high after coming very close to it several time in last one year time period but it cannot be said convincingly that it is distribution because it is still holding on to its strong support levels only sustained break below the under mentioned support levels will confirm the distribution and then fresh down move may begin. Similarly move above 18351.36 will confirm the consolidation. The following are the support area.

1.     Long term trend line support on the monthly chart is at 17603 for June-2016, at 17732 for July-2016 and at 17862 for Aug-2016. Trend line drawn from bottom of 6649.95 joining the bottom of 10404.50.

     2.   The critical support points for the year-2016 are 17425.03

             &17405.48.

     3.   The long term moving average support in the range of    

           17473---17085(it changes every day).

The first sign of correction to continue or end of the uptrend will be sustained 

break below the trend line of 17603 for the month of June-2016, however as long as it holds the critical levels of 17425.03 & 17405.48 for the year 2016 the up move may be in place, furthermore it will get very good support from its long term moving averages which are in the range of 17473—17085(it changes every day). Therefore it is suggested that be alert in existing long trade if it starts trading below 17603 and avoid fresh long commitments if it starts trading below 17473 and avoid fresh long trade below 17405 for sure till it bounces back above 17425.03 and sustain. Please note that sustained close below 17085(it changes every day) can trigger a bigger fall. The broad range for it now is between 18351.36--- 18167.63----18016— 17603---17473. So trader may take their trading call keeping the said range in mind for safe and productive trade.

In view of the overall observation it seems like distribution at higher levels and if it  is otherwise then it should cross its all time high of 18351.36  soon else it could head downwards in coming days/weeks/months.  It is therefore suggested to be extremely cautious in long trade now.

REMARKS:-The trend is up. But it is in correction mode now so let it give visible indication of correction completion before initiating fresh long trade or take your trading call keeping the above mentioned range in mind but with due caution.  

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.

Contact me for strategic guidance to enter and exit the trade.