Why The Dow Jones Might Be Primed For A Climb
Jan 15th, 2009 | By Charles Delvalle | Category: Chart of the DayWith over a trillion dollars in bank losses and foreclosures, bankruptcies, and unemployment all ticking higher by the day, you can be sure that the stock market should head down… over the long-term. But over the short-term, anything can happen…
I’ve plotted two resistance and support lines on the Dow Jones Industrial Average (INDU). These four lines should guide you moving forward as to when to turn bullish or bearish on the Dow.
As you can see, the 9,000 mark has proven to be quite hard for the Dow to break above. Likewise, I believe 8,000 will be hard to get under.
That’s not to say the Dow couldn’t go under 8,000 (the RSI readings prove this). But it’s going to be harder considering it’s already dropped nearly 1,000 points in under two weeks. Likewise, its slow stochastic reading also shows it as oversold. So buying pressure could certainly emerge.
The take home: Be careful about shorting the Dow here unless you see it pass under 8,000. If you’re a gambling man, you could buy shares of the Dow Diamonds Trust ETF (NYSE:DIA) which tracks the Dow Jones, and ride it until the Dow hits 9,000.
Stay Free,
Charles
Charles Delvalle is a self-taught market-timing professional and value analyst who's followed and invested in the market for the past ten years. He uses a unique combination of technical and fundamental research to pinpoint rapid profit opportunities with stocks and options.
Charles is also a staunch contrarian and takes pride in finding undervalued sectors and discovering undervalued, cash-rich companies. He frequently mocks government stupidities and points out the "inaccuracies (or lies, take your pick) that government reporting frequently dispels as "truth".
