Key Decision On DOW: 2 Factors I Am Looking At
I just
got off the phone with a client who is making decisions on what to do
with employee stock options in Dow Chemical (DOW).
A part of the puzzle we looked
at was the technical position of the company on a weekly time frame. Here is
what I found:
- Air Pocket — There was a big
Fibonacci price resistance zone from 41-43. If we close above 43 on this
weekly bar, then we will likely experience “Air Pocket†like action that will
see this stock moving quickly from 43 up to 46 where the next zone sits from
46-49. - Pattern Analysis — right now
we have a Bearish Gartley pattern that is on the verge of “breaking upâ€. When
this pattern fails to hold price down, price will run to the 1.272 to 1.618
extension of that pattern. In this case an extension like that would take DOW
up to the 46 to 49 range.
So, I’m very interested in
having this stock reveal the weekend close on Friday. Above 43 tells me to go
home and buff the horns. However, if we fall back and close in the 41 to 42
range then I’m afraid I have to focus on the idea that this stock could roll
over right here. Bottom line: key decision right here!
Have a great night!
Derrik