Technicals | Nov 23 2015
By Nick Linton-Ffrost
A break outside 5400 or 5100 should set the market's direction for the next month
Upside – trading above 5400 for the ASX200 (XJO) would confirm that a higher low is in place at 4950 and indicate that the ‘ABC’ correction lower from 6000 is complete. That wave count implies targets above 6000 over a period of a 3-5 months.
In the near term the move above 5400 implies a 5900 target which is based on the height of the 3 month sideways pattern added to the break point at 4900. There is also the trend line break target to consider which kicks in around the same level.
Downside – while 5400 resistance remains intact working with a bearish five wave count lower from 6000 is feasible. The implication is that the 3 month trading range is a 4th wave structure which implies a 5th lower to 4400-4500.
Trading below 4900 should trigger such a move (i.e. height of pattern less break point), however if the XJO trades below 5100 for 1-2 days that would be an early warning signal of the move south.
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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