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Technical Analysis: Dow Jones Industrial Average: buy on a pull-back

The Dow Jones Industrial Average is the oldest stock index in the world. It brings together, in an «equal-weighted way», the thirty most important listed stocks on North American markets. The index showed a bullish dynamic, supported by ...


Day By Day – Indipendent Research


the 100-day moving average. This reversed during the summer of 2011, following several unsuccessful tests of the major resistance at 12,750 points, giving way to a real crash! This brutal decline has stopped at the support at 10,710 points, close to the 38% retracement threshold of the bullish movement carried out between 2009 and 2011, and the prices have then entered into a very volatile consolidation phase .The bearishmovement is no longer valid, but we do not expect new peaks in the coming weeks: we are neutral in the medium-term.

04102011_2


Close price 10913.38

2 months Opinion NEUTRAL
2 weeks Opinion POSITIVE

Resistances 11880 / 12290 pts
Supports 10710 / 10450 pts

Anticipation :

In the shorter-term, the support at 10,710 points contained prices very well during each assault, and each is followed by a strong bullish acceleration. A basic foundation for a recovery is taking shape on this solid support. Another pull-back in the index should trigger another bounce.
We are therefore positive in the short-term, and envision a rallying towards the resistance at 11,880 points. We set the invalidation threshold for this positive scenario slightly below the support at 10,710 points.
Traker’s Name Leverage Expense ratio
CS ETF (IE) on Dow Jones Industrial Average x1 0,33%
Lyxor ETF Dow Jones Industrial Average x1 0,50%
SPDR Dow Jones Industrial Average ETF Trust x1 0,18%

Follow-up Analysys: Our DBD Tracker dated 26/09/2011 recommended the purchase of the ISE National 30 index. Since then, prices have reached our target at 72 980 points: a performance of 8.8%.


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Source: ETFWorld – Day By Day – Indipendent Research

 

 

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