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ASX200 At Pivot Point

Technicals | Feb 02 2015

By Nick Linton-Ffrost

Pivot Levels for the ASX200

Alternative wave counts –

Bearish count ( slightly preffered )- if the XJO remains below last weeks high and trades under 5500 or spends more than 4 days trading below 5600 the odds turn in favour of a dip towards 5100. The rationale here is that the rally from 5110 to 5600 has completed an (abc) or three legged corrective rally where the length and timing of wave (c) approximates wave (a).

If this count assumption implies that the rally from 5100 is now complete and a 5-10% pullback is on the cards. A move below 5500 triggers a “sell the rallies” approach.

Bullish count ( our best guess from last week) – the market has broken above the 6 month pattern which implies a target around 5900. Under this scenario the current third wave continues to extend above 5600 and is contingent on the 5500 pivot level holding. The rationale here is that if 5500 support breaks it would indicate a failed break of the pattern as well as a break back under the top of wave (1) which creates wave overlap and implies the rally has been corrective.
 

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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