DOW Theory

Sofearnot

Does anyone know how to Apply Dow Theory, or a method of actually Quantifying where a stock is going to? Using NKLA as an Example, for instance. I know some very basic methods pertaining to flags and pennants where you Add a certain portion, and project out. I know a lot of people use Fibonacci but i’ve never been able to predict which lines or values it’s going to with any degree of Certainty. All of these seem guessing imo. Moving averages are decent, but, again, it doesn’t often respect them. How could you with any Reasonable accuracy project where NKLA is going to in advance?

markd

Dow theory applies to markets, not individual stocks, and it doesn't project price targets.

Edwards and Magee "Technical Analysis of Stock Trends" is the original bible of technical patterns and includes methods of projecting price targets.

Tom Dorsey, Jeremy DuPlessis and Prashant Shah have all written definitive guides to point and figure (PnF) charting which also includes methods of projecting price targets. Look them up on Amazon.

I'll bet there are dozens of Youtube videos on the subject, too.

Here's a link to a Shah video on PnF targetting (the accent takes some getting used to - but his English language books are very clear):

https://www.youtube.com/watch?v=hMznEDH_CaA

lmkwin

Dow Theory has to do with the Dow Industrials and the Dow Transports. It doesn't apply to NKLA.

As far as Measured Moves, I don't know much about those either but here's a StockCharts ChartSchool piece on it.

https://school.stockcharts.com/doku.php?id=chart_analysis:chart_patterns:measured_move_bullish_continuation

On the NKLA PnF chart it shows a bullish Price Objective of 5.50 based on Breakout method. 3.00 based on Reversal method. A way to see these on the weekly chart is to use the Bollinger Bands 10,6 for bullish 'objective', BB 10,3 for bearish 'objective'. Not perfect, but pretty close usually.

Sofearnot

I was thinking something along the lines of Gann and said Dow Theory instead, before I realized you can’t change it

Anyway, disregard the title guys…

Sofearnot

That Stock has been one of my Big winners recently, and I KNEW that it was going to go up. But not entirely sure what price level it was trying to hit. I’ll try to post a Picture, when I get home of it. Maybe somebody knows a reasonably reliable method of forecasting, if there even is a such thing.

Sofearnot

Kinda realized that the minute I posted it (I was reading some stuff about Dow T. at the time). I don't think you are able to Edit posts on here. But, you get the idea.

Good info, Thank you for that.

It occurred to me the other day, that, in 30 years of Investing I don't believe I've ever heard of a single investor stating Convincingly where a price must go. Only that it 'should go Up', or something along those lines. (Yes, i know nothing is ever guaranteed, in the Stock Market)..

(Was studying Gann, but the results were inconclusive )

Sofearnot

I'll take a look at some of those authors sounds really good.

Sofearnot

I think I may have answered my own question, about NKLA.

However, one thing kinda Sticks with me, the Daily chart looks decidedly bullish, but the Monthly chart looks decidedly bearish. Full disclosure: I do not any longer have any position in the stock bull or bear, just asking for educational purposes for everyone's benefit

Sofearnot

Time will tell i know Future readers will have the benefit of hindsight...

Sofearnot

Before we just the gun on this tho, meta recently did the same or Similar thing but Blasted through it

Sofearnot

good info from All thanks

Sofearnot

Nkla was a Bad Mamma Jamma. Made Crazy Money on it, wish I had held it Longer. It's Done, now, Though.