I am sure you have read about the planned SuperTrader seminar at Ahmedabad (please see previous blogpost).
Well, the US markets and the European markets fell heavily yesterday and it seems we are not in for a good opening on Monday....
The recent down move in DOWJONES prompted me to check how the US Markets look from a 'very' long term perspective.
Below is a fifty-year chart of the DJIA (Dow Jones Industrial Average). Phew, what a chart .... and what a developing pattern ... I urge my readers to 'tell me' what pattern they see !
Believe me friends, if this pattern does , what it does, the critics of technical analysis will have nowhere to hide . . .
I will expect your take on the pattern in the 'comment' section. . .
CA Rajiv D Khatlawala
www.investogyan.com
10 comments:
Hello Sir,
I think it is goin to make "Head & Shoulder" Pattern.
M i right ?????
Regds,
Pranav
Hi Sir,
I don't know technical analysis but it looks like a new pattern of lower high and lower lows is forming breaking the previous long term pattern of higher highs and higher lows.
plz comment..
Regards
Vipin
More comments please . . .
CA Rajiv D Khatlawala
Hello Rajiv,
It is a classic H&S pattern on a weekly chart.
I don't trust the theoritical implication of this pattern, on this particular chart.
Reason being -
1. If this pattern plays out, as per the theory, then DOW will be -ve.
Also, we have to remember that Right shoulder is in the process of getting formed. For the completion of right shoulder, it has to touch the neckline, which is at around 7500 levels.
So, for the time being we can say that DOW has a target of around 7500 levels.
When it actually touches 7500, we need to analyse further.
These are my thoughts.
With Regards,
I am seeing the pattern from 1963 to 1975. If that's true then the next fall would deeper than the previous one happened during 2008. Also it need some time frame to look like 1975. Otherwise its too early for a deep drop. Am I right to say that?
Praveen , the H&S pattern down target will not take DOW (obviosuly) to -ve zone... Actually when we have such typicaly situation, technicians normally use %ages instead of absolute values ...just FYI.
Ashok... your observation is similar to what Elliot Wave theorists believe. Even in that case a journey towards sub-8000 is more likely. . .
Expecting MORE comments please . . .
Dear Sir, Is this rounding top pattern..We can also see 40 weeks MA broken of Dow and nasdeq at www.stockcharts.com .. I read it as for 40 weeks US market has to go down as seen on same page of it from Nov 07 to March 09 fall. Dr. Ashutosh Mehta.
Dr Mehta,
I percieve it more as a H&S pattern since a rounding top has the typical feature of NOT creating significant highs ..
Regds
Dear Sir,
It is clearly forming H&S pattern only if second shoulder gets completed. Technically it must not be acted upon till neckline is not broken. Now looking to LH LL pattern it can be expected to target neckline with right shoulder top as stop loss. One more thing left shoulder took approx 5 yrs & head took 6 yrs so right shoulder can take atleast 3-4yrs & during this time Dow can see many ups and downs in short term.
Plz give your view on my comment.
Regards.
Piyush
sir what is the final implication of this pattern.
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