Understanding DOW JONES in the times of a pandemic.
DOW fell from last high of 29,568 (13th Feb) to 18,213 (23rd Mar), and tried to recover back and stayed between 38.2% & 61.8% retracement level.
Dow Jones traded in a parallel range for 2 Months and tried breaching the zone thrice in the hope of recovering completely, although unsuccessfully.
Now taking support and facing resistance around 200 EMA (Increasing momentum). Getting in a narrow range like most index worldwide.
We have a positive trading range of 2200 Points before DOW plunges or rises optimism worldwide by breaking out from 61.8% level.
Below 38.2% - Global outlook will get bearish and Profit booking in longs + Short sellers can trigger another fall. We have 3 levels if the market takes a pause while falling.
Above 61.8% - { We have 2 levels of 61.8% retracement, (Due to different interpretations of last high in calculating Fibonacci) } The First one is the upper pink line, where DOW faced resistance & 2nd one is the black one drawn.
Now Above 61.8% - Global outlook will get bullish (as economies worldwide try to lift the lockdown curbs), but can also be a trap (as there's a high chance of rising cases/deaths worldwide) and we might go back to our levels again. Markets won't recover completely before economies start to function like before which seems like a utopian dream in the near term.
We are trading outside our range for now. This zone will act as an alert for the bullishness in the market for us, vice-versa for the downside.
200 EMA has to be crossed before heading down which will take some time, which means the market might keep the range for now.
Stay Safe & Trade safely :)
Dow Jones traded in a parallel range for 2 Months and tried breaching the zone thrice in the hope of recovering completely, although unsuccessfully.
Now taking support and facing resistance around 200 EMA (Increasing momentum). Getting in a narrow range like most index worldwide.
We have a positive trading range of 2200 Points before DOW plunges or rises optimism worldwide by breaking out from 61.8% level.
Below 38.2% - Global outlook will get bearish and Profit booking in longs + Short sellers can trigger another fall. We have 3 levels if the market takes a pause while falling.
Above 61.8% - { We have 2 levels of 61.8% retracement, (Due to different interpretations of last high in calculating Fibonacci) } The First one is the upper pink line, where DOW faced resistance & 2nd one is the black one drawn.
Now Above 61.8% - Global outlook will get bullish (as economies worldwide try to lift the lockdown curbs), but can also be a trap (as there's a high chance of rising cases/deaths worldwide) and we might go back to our levels again. Markets won't recover completely before economies start to function like before which seems like a utopian dream in the near term.
We are trading outside our range for now. This zone will act as an alert for the bullishness in the market for us, vice-versa for the downside.
200 EMA has to be crossed before heading down which will take some time, which means the market might keep the range for now.
Stay Safe & Trade safely :)