DJIA has made a triple bottom/top formation in the daily chart.If we want to be strict with our wave count, we cannot see any sign of impulsive upward waves from June lows. On the other hand the decline from April-May is looking impulsive. So taking under consideration only the daily chart a trader should have in mind the 12500 level as support and the 13000 level as resistance.
In the 60m chart DJIA has slightly broken below the trading range but bounced right back up. The decline looks impulsive but it needs to close below 12500 in order to confirm the downtrend. Concluding DJIA is still trading inside the trading range having held above support levels. This may be a good sign for bulls, but if the bounce is in 3 waves I would bet on another sharp decline below 12500.
Taking a closer look at the decline, we can label it as a 5 wave impulsive move. Thus bears could have the upper hand again. If this count is correct, then a 3 wave bounce is to follow towards 12750-12800. At those levels I would think of selling this index once again, with a stop reverse at recent highs and a bit higher.
Thank you for taking the time to read my thoughts.
No comments:
Post a Comment