INFOSYS

 #INFY has undergone a steep correction after its quarterly results. Over the past few sessions the trading range has been reduced to a mere 15-20 points. Index has formed four back to back dojis.

However price needs some breathing space and it starts pushing against the walls of its range. Inside the range price acts like a spring which is being suppressed. Longer the suppression stronger will be the release. 

Why should traders care?

Price is undergoing a Bollinger Band squeeze and highly uncharacteristic of INFY to stay sideways for so long. While the focus for the day will be #NIFTY, #BANKNIFTY and other heavyweights, INFY can be a silent mover. Once the move is spotted by the masses the early entrants can just sit back and ride the move.

Dow Jones Transport Average Index

The DJT has always been a fascinating Index to follow. I first came across this Index while I was learning the Dow Theory. It is mentioned in one of his tenets that 'Indices Must Confirm Each Other'. The averages used for comparison were DJIA and DJT. 

The above image shows formation of a Head & Shoulders Pattern in the DJT. This pattern opens up the flood gates for further downside. 

Why a Trader should Care??

Indices move with a lag, but they tend to catch up over time. With the DJT which has topped out in November 2021 and still showing strong signs of further downside, the DJIA is expected to sync with it.