Dow 16/08/01

ChartMan

Legendary member
5,580 46
The support at 350 failed today, followed by a rapid drop to 270.The stochastic and RSI positive divergence here pointed to things to come- a solid rise from 275 to 390,closing up some 50 points on the day.The surprise for me was the drop from open to 275, considering stochastics were already at zero.It took a while to lock into the positive divergence.The bounce at 272 was right on the previous major downtrend support line.( remember the 100 point "shifted" support/res line?)
Surprising too was the blast through of the minor support line on the way back up to 390.
Having broken the down trend of the last 6 days, maybe we go up from here.Looking at the EOD charts, we have a triangle forming, similar to the the August'99 breakout. BB's are closing,and we have recently bounced off the lower BB.The last two bounces off the lower BB have lead to a rise (almost) to the upper BB within 6 days.Today is day four from the lower BB......
If that is the case, we are looking at a target of 600.Handy , that, because it takes us back full circle to 100% bounce up to the high of 1st August.This, in turn, would be 38% retrace of the mid March high of 11,350.
Looks good to me, but just how it will pan out, as always, is a mystery to me.
 

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