How to determine the market trend using Dow Theory?

[Divya S]

<span style=”color: #777777; font-family: ‘Open Sans’; font-size: 13px; line-height: 20px;”>Take a 2 years line chart of a company and mark the Higher top,Higher bottom,Lower top,Lower bottom.</span>

<span style=”color: #777777; font-family: ‘Open Sans’; font-size: 13px; line-height: 20px;”> If the sequence is Higher top-Higher bottom with high volumes – it is BULLISH.</span>
<p style=”box-sizing: border-box; margin: 0.85em 0px 1em; direction: ltr; color: #777777; font-family: ‘Open Sans’; font-size: 13px; line-height: 20px;”>If the sequence is Lower top-Lower bottom with high volumes – it is Bearish.</p>

[Divya S]

Take two years data of a company in the form of line chart. Mark Tops and Bottoms as per Dow theory. Mark Higher Tops and Higher Bottoms, Lower Tops and Lower Bottoms.

when the sequence like Higher Bottom and Higher Top comes with significant volume then it is Bullish we should create long position.

When the sequence like Lower Top and Lower Bottom comes with significant volume then it is Bearish we create short position.

[gorantla.vinod]

need to take at least 2 years of stock data in the form line charts

identify top, bottom, high tops, high bottoms, low tops and low bottoms

if high bottom and high bottom with significant volume, it is bullish trend. take the long position in stock/derivatives

if low top and low bottom with significant volume, it is bearish trend. take short position in derivatives

[Md. Shahidul Islam]

(1) open a line chart, preferably of 2 years (2) Spot Tops and Bottoms (3) identify Higher Tops, Lower Tops, Higher Bottoms and Lower Bottoms (4) if you find Higher Bottom and then Higher Tops it is Bullish trend….and if you find Lower Bottoms and Lower Tops it will be treated as Bearish Trend.

[goodwinbritto]

Dow theory helps to identify the trends as to bullish or bearish. it can be done through identification of major tops and bottoms and then name them as higher tops and bottom.sequence of higher tops and higher bottoms is a sign of bullish trend and the reversal is the sign of a bearish trend.

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