Dow Jones (12876)
It was said (in the review dated 28th April- value 12891) “the Dow is trading near sensitive area of 11900, if sustain we can see a continuation of the rally towards a target of 13200, else watch 12604 for negative clues”.
In reality, after 5 trading session from the review date, the Dow has touched 13191, as against target of 13200, and now once again fallen back in a important trading range of 12700-13100.
So far, the bulls gained 14% from the recent trough of 11508 (Jan 08, when the overall sentiments were sharply negative). Now the question is “is it an end of the corrective rally within the overall bear market? Or the Dow has discounted the bad news and likely to continue its upward march?”
The answer lies in breaking the resistance zone of 13190-13320, i.e. a 0.618% retracement level of the entire fall from the recent high (14279). Failure to post a weekly close above 13320 will increase the possibility of bearish scenario. On the downside 12648 is the stop for the bulls, if broken, a fall towards 12200-12050 region looks certain.
