Dow theory is the concept to derive demand and supply. It will tell whether demand is grater than supply or supply is greater than demand.We need to use Line charts with the minimum duration of 2 years. It is for long term trend prediction. For long term investments, we can predict the trend using dow theory. We need to mark the top and bottom in the line charts. Then figure out the Higher top and Lower top, Higher bottom or Lower bottom. If the sequence is Higher Bottom to Higher top, then the trend is bullish. If the sequence is lower top to lower bottom then the trend is bearish.
We can buy a stock when stock price crosses the previous top in the higher bottom to higher top sequence.
we can sell a stock when the stock price crosses the previous bottom in the lower top to lower bottom sequence.
