ZLBT Chats

Monday, March 26, 2012

Ichimoku Analysis on Dow Jones Industrial Weekly 26 Mar 2012

Let's  look at the weekly DOW charts using the Ichimoku Kinko Hyo indicator and it is clearly very bullish. Tenkan Sen (pink line) is above Kijun Sen (turquoise line), Chikou Span (green line) is above price and Kumo, and the future Kumo cloud is thickening and sloping up.

You will notice that the thick Kumo cloud supported prices during the last quarter of 2011, and ever since prices broke above the Kumo, there has been no u-turn. The bull run looks inclined to resume. 

However, there are two concerns for the bulls:

1. The Kumo cloud all the way into June 2012 is relatively thin, offering weak support.
2. Tenkan Sen is very far from Kijun Sen, the latter representing price equilibrium. Prices tend to retrace towards equilibrium, especially when the Kijun Sen is a flat horizontal line as pictured in the chart.
For the bulls, it is probably wiser to wait for a retracement to the Kijun Sen for a higher reward:risk bullish trade, while bears should wait for a breakdown below the Kumo cloud.  

If PM Najib is seeking a steady Malaysian economic outlook  timed for the imminent GE 13,  this  periodic DJIA chart will be a good call to dissolve Parlimen soon.

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