Edited by Vani Rao
Amidst the Federal Reserve’s comments on ending its stimulus program and the upcoming earnings season, the Dow Jones Industrial Average (DOW) closed the week ended 3 January 2014 at 16,469.99, down 0.05%, from its prior week closing. Looking at the three-minute Candle Stick formation over the last three days, the charts suggest two consecutive Doji formations, which could lead to a major move going forward. At the current levels, the Dow sees selling pressure coming in the near term and could see a strong pullback from the current levels. At this point, it doesn’t look like a favorable market for buyers. WSA would advice investors to stay on the sidelines and wait for the right oportunity to start buying.
Three-day Candle Stick (three-minute) Formation
Technically, the Dow Jones Industrial Average is trading above its 20-day, 50-day, and 200-day simple daily moving averages, indicating a bullish trend going forward. However, strength indicators like the RSI and Willam%R suggest an overbought teritory and indicates a Sell at the current level. Trend indicators like the MACD is above the Signal line, and positive indicators suggest a bullish divergence from the Signal line. Moreover, the Index is likely to fall further from this level in the short term. However, in the long run, the Index could witness some strong strong upward momentum.