DOW psar bear signal

Dow Chemical Co. (DOW), showing a psar bear signal today, could be embarking on just another switchback in a sideways move that began with a gap up in November 2009.

To be a credible bear, DOW must push below $27.88. It's now trading at $29.11. So credibility is some distance away.

The pps gave a bear signal on Tuesday, and the macd remains in bull territory, although it is declining toward the zero-line for the third consecutive day.


The mfi and sto each dove from overbought into the neutral zone on Monday.

The price hit the 20-day moving average today and then retreated upward.

(By the way, on these "You are here" tables, I call everything above the current price "resistance", and below it, "support", although we all know that for a bear play, the downside levels are resistance. Inelegant, I know.)

You are here:

• Resistance
• $31.65, +9%
• $30.72, +5.8%
• $30.34, +4.5%
• $29.62, +2%
• Now $29.03
• Support
• $27.88, -4%
• $27.05, -6.8%
• $26.11, -10%
• $25.57, -11.9%

I would tend to play this as an iron condor, with max profit at expiry between $30 and $26. But, even though my rules allow April iron condors, April expiry is still a bit far away for my taste, and March is way to close.

Abbreviations:
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic