Finweek English Edition - - Creating wealth -

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).

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