Friday 11 October 2013

Trading the Dow jones industrial index

Can you see that the Dow jones industrial index touched the 200 days moving average(red line) and rebounded...a 300+ point rally. now it is testing the 50 days MA(blue line)...if it breaks, maybe we will get a new high 15,800....fingers crossed..

At the bottom is the MACD indicator...can you see that the rallies and decline happened after a crossing took place?...when the two lines cross, we can expect a change in short term trend either up to down or down to up.

The top portion of the picture is the RSI (relative strength index), when it goes near or above 70 % it means the stock is over bought and a pull back (decline in price)is expected. When it goes near 30%, it means the stock is over sold and a rebound is imminent...it works quite nicely and really simply to apply.

The US govt won't be so dumb to let US default....right?

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