Down Theory was established in early 20th century by Charles Dow based on his market observations. According to this theoory the stock moves in a pattern of Tops and Bottoms which can be qualified as Higher Top (HT), Higher Bottom (HB), Lower Toop (LT) and Lower Bottom (LB).
When a stock moves in the sequence of HB –> HT –> HB –> HT it’s said to be in uptrend and every new HT can be used as buying opportunity with preceding HB as the stop loss. The trend is valid as long as this sequence continues.
When a stock moves in the sequence of LT –> LB –> LT –> LB it’s said to be in downtrend and every new LB can be used as selling opportunity with preceding LT as the stop loss. The trend is valid as long as this sequence continues.
The trend is said to be strong when the volume spikes while HB or LT are formed.
The Dow Theory should be used with 2 years data points on a daily line chart. Since this is a lagging indicator of the trend, it’s not suitable for the short term or intraday trading. However it is an excellent tool to identify demand and supply zones for a stock.
Synopsis of Dow Theory
feel free to call us +919500077790 info@eqsis.com
Stock Analysis
M | T | W | T | F | S | S |
---|---|---|---|---|---|---|
1 | 2 | 3 | 4 | 5 | 6 | 7 |
8 | 9 | 10 | 11 | 12 | 13 | 14 |
15 | 16 | 17 | 18 | 19 | 20 | 21 |
22 | 23 | 24 | 25 | 26 | 27 | 28 |
29 | 30 |
Bullish View
Bearish View
- Bearish-GAP-SHORT-BICON-25-10-2019 October 25, 2019
- FEDERAL BANK – BEARISH ENGULFING October 17, 2019
- Cummins India – Bearish Engulfing – 24Sep19 September 25, 2019
- Day29-Tata Motors DVR – Bearish Piercing – 12Sep19 September 12, 2019
- Day27-Bearish-Engulfing pattern-Tech Mahindtra-09Sep19 September 10, 2019
How this forum help stock traders?
Stock Trading is business, the success depends not just on capital or subscribing advisory services or participating workshops. The factors such as your awareness level about business, Efforts and your contributions, Smartness, Knowledge in analysis and trading instrument, availability of infrastructure and emotional control determine your success.
Hi,
You did an excellent job