Technicals | May 25 2015
By Nick Linton-Ffrost
5750 pivot level still holds key
Bullish case (top chart) – if the ASX200 (XJO) can hold above 5575 over the next few days and push back above 5750 the odds will turn in favour of a rally to 6000 plus over the next 2-3 weeks. The wave count in this case assumes that the correction from 6000 to 5575 is complete given the three wave count (abc). A buy signal will be triggered if the XJO trades above the top of “wave 1? at 5750 and would imply a five wave move to 6000.
Bearish case (bottom chart) – assumes that the move lower from 6000 to 5575 has counted out five waves which indicates the downside move is taking hold. The implication is that after trading sideways between 5575 and 5750 the market will take another leg lower (c wave) to 5350. This scenario is contingent upon the XJO not trading above 5750 for more then 2 days. If the market trades for more than 3 days below 5650 the odds for a break lower will increase.
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Another trading idea from
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