Materials solutions supplier Dow Inc. (DOW) declined in price in 2022 to lows in September and October before rebounding into November. Prices had chopped sideways the past two months and are poised for their next move. Let's check the charts.
In this daily bar chart of DOW, below, I see a potential inverse head-and-shoulders bottom pattern. The price action is looking promising but the volume pattern is not going in the right direction. Prices made a left shoulder in July, a head in September/October in the $43-$43 area. A shallow dip in mid-December may have been the "right shoulder". The picture seems right but the trading volume does not fit the picture.
Trading volume should increase through a base pattern and for DOW it doesn't. Back in July the buying is likely to be tentative as we have a lot of unknowns. From the head or low of the pattern we should see volume increase as investors become more certain of the future. This chart, below, shows a decline in volume in November and December -- not what you want to see.
The daily On-Balance-Volume (OBV) line shows a slight increase from October. The Moving Average Convergence Divergence (MACD) oscillator is hovering just above the zero line.
