Dow Chemical: A Longer View
Dragonfly Capital | Oct 11, 2013 02:35AM ET
Dow Chemical, (DOW), makes a lot of things, including plastics. What interests me about the stock as a longer term play is the 3.3% dividend and of course the chart. Let's take a look starting short term then expanding. The daily chart below shows the rise from July to a peak at 41 in mid September. Since then it has pulled back and now made a double bottom just above 38 and is moving higher. A take out of the previous high carries a Measured Move higher to 42 and then 47. The Relative Strength Index (RSI) is bullish and rising with a lot of room to run before being overbought and the
MACD is about to cross positive as it turns higher. Both support more upside on this timescale. But it does not end there. The weekly chart shows that a move over the 41 area also tops the high from May 2011, building yet a bigger loosely shaped cup to rise out of. The target on the Measured Move would be 61. There is also a Harmonic Butterfly that has a Potential Reversal Zone (PRZ) higher at 45.51, suggest a break out could be a straight shot to their before and pullback or digestion. The RSI is bullish on this time scale and the MACD rising both supporting a further move up.
And the monthly chart has something to say as well in favor of more upside. The symmetrical triangle that has been forming since 2007 is deep into the apex and many will suggest the move out of it higher this month will not be powerful. That may be the case but still the Measured Move would take it to 80. It also has a bearish Deep Crab Harmonic with a PRZ at 73.90, so it is not that crazy to think of 80 as well. Both the RSI and MACD support a continued move higher on this timeframe as well. It is projected to take a while, until 2016, but remember those dividends?
Disclosure: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Original post
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