Step 5

Dow Theory (Dow Jones Theory) is a trading approach developed by Charles Dow. Dow Theory is the basis of technical analysis of financial markets. The basic idea of Dow Theory is that market price action reflects all available information and the market price movement is comprised of three main trends
line chart will be used in Dow Theory,Minimum look up period is 2 years, form 3 months to 6 months can forcast based on Dow Theory.
Take the data of approx 2 years and plot it into line chart
Mark the major tops and major bottoms.
sequence to identify the trend.
Higher bottom and Higher Top with significant volume it is a Bullish trend. Demand > supply market is favour to the buyers.
Lower bottom and Lower Top with significant volume it is a Bearish trend. Supply > Demand Market is favour to the sellers.
The major critics against Dow Theory is that it can not be used in short term, it can be used only in long term. It still remains on top because it is the first ever concept to describe demand and supply.
Demand > supply market is favour to the buyers.
Supply > Demand Market is favour to the sellers.
it is reliable for 3-4months
In stock market technical analysis, support and resistance are certain predetermined levels of the price of a security at which it is thought that the price will tend to stop and reverse. These levels are denoted by multiple touches of price without a breakthrough of the level.
Typically expected that prices should rise after touching support. Resistance: Generally expected that prices should fall after hitting resistance.