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Equity market bellwether i.e. Dow jones industrial average (DJIA) has made life time high in the current year. DJIA is the index which has outperformed against emerging market index such as Indian Equity market which was failed to cross it previous high and moving lower from last 2 months.
DJIA has made life time high of 15521 in the month of May 2013. Since then prices have note breached the same level and moving sideways to downside. Prices are respecting our strong resistance zone which we have been mentioning in our Global report – The Global Waves since past many days.
Elliott wave theory, Fibonacci retracement and many other technical tools helped us to plot the crucial resistance level on DJIA.
DJIA Daily Chart: Medium term chart:
DJIA Daily Chart:
Wave Analysis:
On Wednesday, we had speech of Federal reserve chairman Ben Bernanke, he said that it will not pull back its $85bln a month bond buying programme just yet, but made clear that if America's unemployment rate continues to improve and inflation edges closer to 2%, then it will start tapering its monetary stimulus programme. After this statement we have observed sharp movement on downside in DJIA and index closed on negative note. Technically, prices failed to persist within the upward sloping black channel, breached the immediate support of 15000 and arrived near the next support of 14700 and prices closed lower by more than 2%.
As seen in daily chart, in last two trading sessions we have observed fall of more than 500 points in US equity market. This indicates the end of wave …..of double zigzag pattern (a-b-c-x-a-b-c) and…... Prices had given respect to resistance zone of …… which we have been mentioning since past few weeks in the reports.
We can observe above in medium term chart, prices are moving higher since 2009 and it is in strong uptrend since past 3 years. Hence, to catch the top in secular uptrend we need more negative price confirmation which will be obtained below ……. levels. Unless that does not happen positional trader should refrain from creating short positions as of now.
In short,…………
DJIA is now approaching crucial resistance levels. Trading strategy has to be formed in accordance with the crucial level on upside. Do not miss the next turn in this index. Get access to International currency – EURUSD, Comex Gold and Comex Silver in the Global research report- The Global Waves The report will be mailed daily and you can get access online on the website as well under client login section. To know more get in touch with our product specialist NOW!!!
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