DJIA (US Markets): AT LIFE TIME HIGH! BUT Nifty still down 10% !!!
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The crisis of 2008 supposed to have originated in US and Europe which later spread across the globe.
US unemployment rate and other macro economic data still indicate that they are still not completely out of the woods. However, whatever may be the case, interestingly US equity market – Dow Jones Industrial Average is at LIFE TIME HIGHS!!! In contrast, India was supposed to be a growth story and relatively insulated to an extent from the world financial crisis but Indian equity markets trading almost 10% below the life time highs. During such scenarios it is therefore important to use objective tools like Elliott wave analysis and technical indicators when normal fundamental logics goes for a tailspin…
DJIA Weekly Chart:
As shown above in weekly daily chart of DowJones Industrial Average (DJIA), prices have breached the previous high of 14200 which was made in the month of October 2007 and made a life time high of 14540. This index has characteristic to move in an expanding pattern. Since 1999 prices are moving in an expanding pattern (shown by black color trendline). Up move from 2010 seems corrective in nature and prices have formed similar expanding pattern as seen from daily chart.
As per wave perspective, prices have ended primary wave (5) in the month of 1998 levels. Since, then it is moving in expanding pattern in a corrective manner (A-B-C-D-E). In 2009, prices have finished primary wave (C) near 6000 levels. Thereafter, it has moved higher in the form of primary wave (D).
As seen in daily chart, prices are at life time highs and there is still some steam left. Interestingly, wave (e) = wave (a), wave y= wave w and wave (e) = 161.8% of wave (c) comes near the resistance zone of 15200-15500 levels. Looking at current scenario, trend remains positive over medium term and prices can move higher in the form of minute wave z of minor wave (e).
In short, even though prices are in matured stage of uptrend there is still more room left before the major trend on downside begins. We are not seeing any reversal signs as of now and move below 14000 will provide first negative sign. 15200 – 15500 is the maximum where the current trend can go…
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