INDU Dow Industrials Daily Chart H&S

The blue lines show the H&S pattern that we watched form this year. The head at 12800-ish, the neck line at 11600-ish, that is an 1200 difference, thus, target was 11600-1200 = 10400, achieved at the early October bottom. The red and green lines show the last move higher in the back half of October. MACD histogram, stochastics and money flow were all negatively diverged wanting a spank down for price, which occurred as price came down to test the H&S neck line at 11600-ish. The RSI and MACD line, however, still would like to see another matching high in price in that 12200 area, thus, price is undergoing upwards buoyancy again. If price should come all the way back up to test 12200, negative divergence should be in place across the board which would then lead to more sustained down side moving forward and an attractive short entry area.

Over the last couple days, price is perched on that 200 day MA like a bird perched on a wire, thus, 11975 is key support going forward. Price is now very agreeable to sideways movement using the flat 200 day MA as a centerline. Current range is 11600-12200. For the upside, 12200 remains in play at which time should set up the short side. If price fails the 11975 support (200 day MA), then the downside would need to be immediately respected. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.