Dow Likely to Drop to 10,600: Charts

The rough ride for equities may not be over, according to the charts. After losing 500 points on Thursday, the Dow could drop another 700 point before finding some support, Darryl Guppy, CEO of told CNBC on Friday morning.

Close-up of a pen on stock price chart
Close-up of a pen on stock price chart

"With the head and shoulder pattern in the Dow, it's giving us a downside target projection of around 10,600," Guppy said, after Wall Street suffered its worst sell-off since early 2009.

Guppy believes the 3 major U.S. indices - Dow , S&P 500 and Nasdaq are likely to hit their downside targets.

"The key factor is we are now beyond the crossroads," he warned, "For instance the S&P, we've moved below the neckline value and we've moved below the neckline value in the Nasdaq."

He thinks the Nasdaq could hit 2300, a 250 point move down from Thursday's close; and the S&P 500 could hit 1140.

The Dow and the S&P 500 shed over 4 percent on Thursday. The S&P is now in correction territory, having lost more than 10 percent since its April 29 high.

The selling continued well into Asia, with the Nikkei falling as much as 4 percent in early Asia trade.

For investors looking to buy on the dips, Guppy said there may be some "bear reliefs" on the way down but investors should wait it out.

"This is not a good time to go buying bargains, bargains will be coming in a few weeks time."