So, why not analyse the Dow to check whether the rally in the Indian markets will get support from it!
The Dow jones chart is showing a typical Inverse Head and Shoulder pattern with the neckline being at 8200-8225 levels... The immediate right shoulder is at 7750 levels.
Now a break above the neckline should see the US market gain further and target its first level of the 200 DMA which is placed at 9000.
But there seems to be strong resistance beyond 8100.
What is the alternative scenario??? - That without breaking the 'neckline', the price breaks the right shoulder ...
Such an event will be negative and can lead to a fall to 7200-7000 levels again! And this will surely not be good news for the world markets - including India. The bullishness built up on the Indian charts may come to an abrupt halt, if not supported by the DOW.... And we will not even know what hit us !!!
Wooops... No one said that investment and trading is an easy game !!!
Happy Dow Watching!
CA Rajiv D Khatlawala
Head of Research & Training
Jhaveri Securities Ltd.
3 comments:
Rajiv, yesterday dow futures went up till 8274 and then retraced a bit...you think it has breached the neckline and now its headed towards the coveted 9000 mark? Can we expect a huge move in the Indian equities in the upcoming week?
The indications are in Favor of a upmove in Indian indices ... Not only the DOW but even if you analyse the FTSE , Hang Seng and Nikkei indices - they are suggesting upmove . . .
Regds
thanks...waiting for your retake on Crude again...yesterday it retested the upper range of crude again and came close to 2700...how does it look for the next week??
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