DOW JONES PREDICTION

Why analysis of DJI?

It is mostly seen that Indian markets follow US markets as FII infuse lot of investment in our markets. However there psychology is to follow the trend in US markets. However it is not entirely true as Indian markets do spring to life and at times do there own trajectories. eg In end Sep DJI touched its pre Covid levels of 28700, however Indian markets were at 15300 much away from pre COVID levels of 12400.

However the similarities of market structures can't be ignored, both of the indexes had a similar structures of HH/HL & LL/LH. In a globalised world the interconnected things can be easily seen. Whats next?

On monthly chart DJI has formed a flag pattern with two point touch at the bottom of flag around 31500.

Twin Trendline Concept

First Trendline. On weekly charts, following twin trendline and four point touch concept is elucidated on the chart. The first trendline clearly shows touch points at apr 22, aug 22 & oct 22. Thereafter at fourth touch point Nov 22 there was a breakout seen and DJI made a high of 34800. The first trendline also has acted as support twice in Dec22 and mar 23.

Second Trendline. The touch points occurred at 34800 in Dec 22, 34300 Feb 23 & going by the geometry the fourth touch Pont should happen in Apr 23 at 34000 levels.
This will entail a 2200 point move from current 32717 to 34000 levels. Of course this will be not a straight move but it will have some zigzags.

Price action.

Montly charts - Flag patterns

Weekly Charts - Two consecutive Green Candles

daily charts - W structure which is a bullish structure is underway.

Future Likelyhoods. There may be reaction at fourth touchpoint and thereafter in May/Jun there will be breakout to touch the top of box 37200.

RSI analysis. On monthly charts RSI is above 50 levels, on weekly charts it is 48 and daily charts at 51. RSi is supporting an upmove.

Overall Analysis. DJi should touch 34000 levels based on price action, price pattern, twin trendline concept and RSI. However any crisis emerging at geo-political levels at economic or military will negate this hypotheses and DJI may head southwards.

Modelling and simulation are important to predict the future movements. However they will always remain prediction with no certainties. Markets like GOD have their own ways which are difficult to fathom. But human endeavour must continue for TOMMOROW is always ANOTHER DAY!

Views Welcome.

Regards

Comment:

VARIANCE OF MARKET STRUCTURE - DJI & NIFTY

DJI after bottoming out is moving up, the current dip is just a retracement before commencing its upmove.

NIFTY after completing it upmove has not classically bottomed out and its scope for fall remains. What held NIFTY from falling?

Numerouus factors - Macro economics, better handling of COVID, FOREX res, political leadership, not bad earnings despite the fall, availability of liquidity and accommodative stand by RBI. There may be many other factors but bottomline NIFTY held.

In future the question which is pertinent is "Will upmove in DJI pull Nifty to new highs"?

The entire move looks akin to move from Feb 2018 to Dec 2019 wherein price was making HH while RSI was making LL with clear emerging divergence which culminated in COVID fall.

It looks like history will repeat however in the interim there will short rallies and drops mostly around the encapsulated box of NIFTY. One should not expect a massive bull rally in near future.

Views welcome.

Regards

Comment:

KANGAROO MARKETS

Comment:

As expected DJI has moved up, now is the time it has to deal with trendline. Lets see how it behaves

Comment:

$ point touch completed, target 1 done, now lets see reaction at trendline. Best case scenario is gap up opening on Friday for it will give clear trend indication.

Otherwise one can see a reaction at trendline with some retracement followed by an upmove.

Comment:

RANDOM THOUGHTS ON DOLLAR INDEX

Taking Dollar Index as a measure of being inversely proportional to DJI. If you see dollar index on weekly / daily charts they are at the mean and Fridays bullish engulfing candle is a precursor to its upmove in two or three sessions.

There is first trendline and 20 EMA to give it a pause and thereafter is the second trendline. I see dollar index moving up to second trenline say for next 6/7 weeks creating volatility in the DJI and thereafter breaking it till the pitchfork level of 105.

This will classically create a double top around that levels and then a sure down move should commence. If assuming the above postulate comes true DJI and NIFTY both will start it downward journey on tuesday/wednesday.

Now this upmove on DXY is likely to break the March levels on DJI taking DJI to new lows or may be till the bottom of the box. If this be so the NIFTY too will start its southward journey.

Everyone sees the same chart and same candlesticks. Weekly three/four white soldiers are followed by some consolidation and breakout ie the conventional prediction.

However I have given the contrarian view which may or may not come true.

Views Welcome

regards