DOW, Dow Chemical

As the Dow Jones looks like it may break through a critical level today on the job numbers, that other Dow still supports the big picture outlook. Here are the charts;

dow feb 2012dow febr 2012 m

The pattern is essentially the same as that of  hundreds of other stocks, a first wave down (A) followed by a very clear B-wave up and now the C. Wave 1 down and an a-b-c up are now pretty well complete, see detail below.

dow feb 2012 s

Anything is possible so this leg up could still develop into something bigger and higher but going by the present evidence this would be highly unlikely. Both the 5 waves down of wave 1 and the a-b-c up are unmistakable. Also this fits the bigger charts perfectly. The rebound has been a little over 62% and  very close to where c=a. The RSI is at nose-bleed levels and deteriorating AND the MACD is in a similar position. The 5th minor wave of c may be a wedge with perhaps another dollar to the upside but that should be about it.

Fundamentally the stock is expensive at close to 14X /e, but a yield of 2.8% still compares well to that of 10-year govies. But who cares. This stock is about to dive back down.