The Dow Jones Industrial Average gained a 'big'* 1.4% on Friday the 13th to close the session at 12,307.35, gaining 166 points. Rallying on 4 of 5 days last week, DJIA crossed above its 5-day moving average, but still remains below its 10, 20, 50, 100, and 200-day averages. DJIA has been in a steady downtrend since trading above the 13,000 level mid-May. Is it time to get back to 1300?
* One-day percentage gain is more than one standard deviation stronger than the average one-day percentage change measured over the last 30 trading days.
Q: How has DJIA performed in the past when, while trading below its 200-day moving average, it records a 'big' gain on Friday the 13th?
A: According to the 10 previous occurrences of this event, EventEdge indicates that DJIA has shown a strong bullish edge that peaks 24 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Friday, 13 June 2008) is Friday, 18 July 2008.
DJIA rallies in 100% of the cases (10 of 10) by an average of 6.2% relative to the close on the event date. Which, based on the close on the event date (12,307.35), provides a target price of 13,070.41.
HYPERLINK "http://www.markethistory.com/staff/detail.html?s=ronish" Ronish Patel is an analyst with MarketHistory.com.
