Technicals | Oct 20 2014
By Nick Linton-Ffrost
We suspect the ASX200 (XJO) has completed a five week decline which should be followed by a 5150 – 5450 range bound market over the next 2-3 weeks before another leg lower towards 4900.
Our view is based on our rising wedge break target and wave count assumptions. We are assuming the break lower from the 12 month rising wedge pattern implies a target near 4900. In wave count terms we suspect the XJO has traced the first leg (A wave) in a series of three waves (i.e corrective structure) towards 4900.
We suggest watching for sell signals over the next 2-3 weeks with the aim of catching the (C wave) lower. Trading above 5500 for over a week 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.
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