Technicals | Feb 29 2016
By Nick Linton-Ffrost
Pivot levels at 4830 and 4925
Our medium term view is that the ASX200 (XJO) has completed it’s descent from 6000 to 4700 which implies a corrective bounce towards 5400 over the next 4-6 weeks. In the near term we suspect a higher low has formed at 4830 (i.e completion of wave ‘2’) which should be followed by the next leg higher towards 5400.
Completion of move from 6000 to 4700 assumptions (chart 1)
- five wave count improves odds for rally to 5400
- 5400 target based on “return to top of 4th after five have completed" rule
- break of 6 weeks trend line implies a 5400 target which is the height of pattern added to 4880 break point
Our wave ‘2’ completion assumptions (chart 2)
- achievement of downside target derived from the break at 4980
- pull back to 6 week down trend line (5350 to 4700)
Our view is contingent on the market holding above 4830 and pushing back above 4925 within the next 2-3 days. Trading below 4830 turns the odds in favour of a move lower towards 4700.
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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