DOW JONES

Dow Jones (10258)

DJIA is showing a possible H&S Bearish pattern where a sell off can come near 10700 approx 1120 for S&P. If this pattern holds true then the target for DJIA is 8200 and 850 for S&P.

Since we tend to move according to global markets trends the area of 5100 might act as a tough resistance. Also the above pattern suggests a very big downside which may trigger another 10% fall in our markets. Hence this rally should be used to exit from long positions specially those with leveraged/funding long positions.

Also FII figures in NSE/BSE Cash segment show that they have been selling even in the bounce from 4800. Domestic Institutions buying is mainly due to pressure to hold PSU stocks inline for divestment, while retail and HNI get trapped in bulk by averaging there long positions at every fall.

Fundamental triggers like Delayed monsoon in INDIA, Strengthening US Dollar, Fear of stagflation across EUROPE (similar to what JAPAN is witnessing for the last 20 years) and Pressure on CHINA to reduce control on YUAN and Declining COMMODITY prices are key reasons why we can witness further correction in global markets.