Technicals | Nov 17 2014
By Nick Linton-Ffrost
Emerging Sell
We suspect the corrective rally for the ASX200 (XJO) from 5150 to 5550 is near completion which should be followed by a 5200 to 5450 range bound market over the next 2-3 weeks before another leg lower towards 4900.
The view is based on our rising wedge and wave count assumptions. We suspect the break lower from the 12 month rising wedge pattern implies a target near 4900. In wave count terms we are assuming the XJO has traced the first leg (A wave) and is completing the (B wave) in a series of three waves towards 49.00.
It is also worth noting that the recent rally has pulled back to the break level of the wedge pattern around 5450/5500. At times these break levels provide turning points therefore we suggest watching for sell signals over the next 1-2 weeks while trading above 5550 for two weeks 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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