Technicals | Aug 29 2016
By Nick Linton-Ffrost
Failed upside break turns the odds in favour of a move south
Last week's failed break above the previous nine day range (wave “ii”) for the ASX200 (XJO) is a minor indicator of weakness which may be enough to trigger the bearish view we mentioned last week.
The bearish count assumes that the market has completed five waves move up from 4700 to 5600 based on the following indicators –
- achievement of the target derived from the break out of wave 4 (green)
- resistance at the top end of the 7 month uptrend channel (red)
- where wave 5 approximates the length and timing of wave 1
The implication is for a pull back to the following targets –
- 5425 (top of wave 3) over a period of 3-5 days
- 5300 is the 4th wave break point (green) and bottom end of channel. Expected timing would be 2-3 weeks
- a break below 5300 would imply a dip to 5050 (bottom of wave 4)
Trading above 5575 for more than two days negates our view.
Another trading idea from
Fifth Wave | fwtc.com.au
FW generates over 150 Trading Alerts on the ASX100 each year. We are a subscription service specialising in short term technical strategies based on 27 years experience.
AFSL 319830 | Disclaimer
Reprinted with permission of the publisher. Content included in this article is not by association the view of FNArena (see our disclaimer).
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.
