HOT TOPICS LIST
- MACD
- Fibonacci
- RSI
- Gann
- ADXR
- Stochastics
- Volume
- Triangles
- Futures
- Cycles
- Volatility
- ZIGZAG
- MESA
- Retracement
- Aroon
INDICATORS LIST
LIST OF TOPICS
PRINT THIS ARTICLE
by Arthur Hill
Dow Chemical led the materials sector higher from mid-August to early December, but a double top is taking shape with signs of distribution.
Position: Hold
Arthur Hill
Arthur Hill is currently editor of TDTrader.com, a website specializing in trading strategies, sector/industry specific breadth stats and overall technical analysis. He passed the Society of Technical Analysts (STA London) diploma exam with distinction is a Certified Financial Technician (CFTe). Prior to TD Trader, he was the Chief Technical Analyst for Stockcharts.com and the main contributor to the ChartSchool.
PRINT THIS ARTICLE
ACCUM./DIST. CHAIKIN
Dow Chemical Testing Key Support
01/12/05 04:00:41 PMby Arthur Hill
Dow Chemical led the materials sector higher from mid-August to early December, but a double top is taking shape with signs of distribution.
Position: Hold
| Dow Chemical met resistance just above 51 in early December and again in late December. The two reaction highs form a sizable double top that would be confirmed with a support break at 47. Support at 47 is clearly marked by the November 4th gap and December 12th reaction low (green arrows). A break of this level would project further weakness to around 43 (51 - 47 = 4, 47 - 4 = 43). |
| The right portion of the pattern shows a sharp decline to support and then a consolidation over the last few days. This consolidation looks like a flag, which is typically a continuation pattern. The prior move was down and a move below the flag low (47.50) would signal a continuation of the late December/early January decline. This would also foreshadow a support break at 47 and confirm the double top. |
|
| Figure 1: Dow Chemical. The bearish setup is there, but what are the odds of a breakdown? The accumulation/distribution line, which measures buying and selling pressure, already confirmed its double top and suggests a good chance of a support break at 47. |
| Graphic provided by: MetaStock. |
| Graphic provided by: Reuters Data. |
| |
| The bearish setup is there, but what are the odds of a breakdown? The accumulation/distribution line, which measures buying and selling pressure, already confirmed its double top and suggests a good chance of a support break at 47. Even though the peaks do not exactly match up with the double top in Dow, the accumulation/distribution line clearly shows two reaction highs (red arrows) and a support break (gray arrow). More important, this indicator has already confirmed its double top and shows a serious increase in selling pressure. Volume often leads price, and this indicator is forecasting more weakness. |
Arthur Hill is currently editor of TDTrader.com, a website specializing in trading strategies, sector/industry specific breadth stats and overall technical analysis. He passed the Society of Technical Analysts (STA London) diploma exam with distinction is a Certified Financial Technician (CFTe). Prior to TD Trader, he was the Chief Technical Analyst for Stockcharts.com and the main contributor to the ChartSchool.
| Title: | Editor |
| Company: | TDTrader.com |
| Address: | Willem Geetsstraat 17 |
| Mechelen, B2800 | |
| Phone # for sales: | 3215345465 |
| Website: | www.tdtrader.com |
| E-mail address: | arthurh@tdtrader.com |
Traders' Resource Links | |
| TDTrader.com has not added any product or service information to TRADERS' RESOURCE. | |
Click here for more information about our publications!
Comments
Date: 01/12/05Rank: 4Comment:
Date: 02/01/05Rank: 4Comment:
|
Request Information From Our Sponsors
- StockCharts.com, Inc.
- Candle Patterns
- Candlestick Charting Explained
- Intermarket Technical Analysis
- John Murphy on Chart Analysis
- John Murphy's Chart Pattern Recognition
- John Murphy's Market Message
- MurphyExplainsMarketAnalysis-Intermarket Analysis
- MurphyExplainsMarketAnalysis-Visual Analysis
- StockCharts.com
- Technical Analysis of the Financial Markets
- The Visual Investor
- VectorVest, Inc.
- Executive Premier Workshop
- One-Day Options Course
- OptionsPro
- Retirement Income Workshop
- Sure-Fire Trading Systems (VectorVest, Inc.)
- Trading as a Business Workshop
- VectorVest 7 EOD
- VectorVest 7 RealTime/IntraDay
- VectorVest AutoTester
- VectorVest Educational Services
- VectorVest OnLine
- VectorVest Options Analyzer
- VectorVest ProGraphics v6.0
- VectorVest ProTrader 7
- VectorVest RealTime Derby Tool
- VectorVest Simulator
- VectorVest Variator
- VectorVest Watchdog