DOW JONES – LARGE UPSIDE TARGET
Trend: Up ( but currently overbought). Strategy: Investors and traders buy pullbacks on an ongoing basis. • This long- term chart shows the Dow having broken out of a multi- year broadening formation ( lines 1 and 2). It still has far higher to go before reaching its target. • The weekly relative strength index ( RSI, on top) is overbought and is showing a negative divergence, which is an early warning of a correction to occur on the weekly chart. However, the longer- term picture still looks very good. Pullbacks remain buyable for traders on an ongoing basis. And medium- term corrections will present longer- term players with opportunities to buy. • The larger target ( minimum) is 15 300, ie the height of the pattern projected up. Traders place your shortterm stop- loss as a daily close below 12 520. For the medium term, the stop is two consecutive daily closes below 12 500 ( line 3 support).