Understanding the supply and demand zone to confirm the trend of the stock. Dow theory plays an essential role in establish the trend which is vital to place long/short positions.
- : Dow Theory is essential to identify the trend of the particular stock.
- : Daily Charts with a minimum look up period of 2 years. The trend forecast could be utilised for 2-3 months.
- : Higher Bottom - Higher Top with volume signifies Bullish trend. Lower Top - Lower Bottom with volume signifies bearish trend.
- : Major Critics - Not Sure. It remains at the top of the analysis since it captures the trend of the particular stock which plays a significant role in understanding bullish/bearish pattern.
- : Create Long positions when bullish patterns are confirmed (HT - HB) and short positions when bearish patterns are identified (LB - LT). The trend will be visible for a period of 2-3 months.
- : Support is the lowest level of the stock and resistance is the highest level of stock.
- : What are the major critics against Dow Theory?
- : What are Support and Resistance? *