Dow is Infested With Sharks

by Greg Harmon

Dow Chemical, $DOW, has been living with sharks all year. The Harmonic type of sharks. Since late January the chart below shows the Bearish Shark playing out. In mid May it went above the Potential Reversal ZONE (PRZ) and came back down through by the end of the month. The reversal has been playing out and it is now at a inflection point. Last week it hit a 61.8% retracement of the range of the Shark and held. This is a stall at the target for the reversal. The Relative Strength Index (RSI) continues to look lower, while the Moving Average Convergence Divergence indicator (MACD) That is the key.

So what is next? A bounce here over the 50% retracement and 100 day Simple Moving Average (SMA) at 32.58 triggers a long entry looking for move higher to resistance at 34.30. And then the previous high. But a breakdown below the 31.86 level at the 61.8% retracement has a target lower at 29.52, a full retracement and the Measured Move at 29.50 coincides with it. Two signals, two plays. Take what it gives you.

See the original article >>