Dow Above it's Intrensic Value.

22 Jun 2023

On 15th June Dow had given big green candle stick, and in a single day it touched long term resistance line (yellow line on top). Second yellow line is upper end of uptrend channel which started from 2017, and Dow is trading above it. (Marked with red Circle ) Previously too Down had traded above uptrend channel and after few days again came in line with channel. This uptrend channel is consider as intrensic value . If we compare it with inflation index then we see that inflation index too keep rising in uptrend only. I have never seen inflation index graph running down. Hence Dow value also keep rising along with inflation index and uptrend channel is formed. Any trading above this channel is consider as above intrinsic value and any stock or index has to come to it's value. This is importance of channel drawing long term channel . Right now Dow is above channel and is consider as above intrinsic value. Last analysis it was said that above uptrend channel index is not tradable, and we see in very next day Dow started loosing it's sheen. Trade if to initiate is on short side. Also said if shorts are open, to cover if Dow trade above channel or keep hedge. That seems to be working. Righ now shorts can be initiated as Dow is trading above intrinsic value. It's not easy job, only who are well versed with Future and option can trade shorts with hedging if necessary on their own risk. Rest can sit on sideline till oppertunity arise. This analysis is made on economic basis and for knowledge purpose and not for trading.