Technicals | Apr 18 2016
By Nick Linton-Ffrost
Our 5400 target remains in play while 5000 holds
We suspect the ASX200 has completed a (B) wave lower after forming a higher low at 4900. The implication is for a (C) wave rally towards 5400 over the next 4-6 weeks. View based on the following –
- completion of five major waves down from 6000 implies a bounce to the top of wave (4) around 5400
- the corrective rally should trace out a three legged structure (A.B.C)
- rally from 4700 to 5225 is wave (A) after tracing out five minor waves
- descent from 5225 to 4900 is wave (B) after tracing out three minor waves
- (C) carries to 5350 – 5400 over 3-4 weeks where (C) approximates (A) in time and length
Trading below 5000 for 2-3 days negates.
Two ways to trade our view –
- Aggressive – buy using a 5100 limit placing stops below 5000 using a 5400 target
- Conservative – wait for a higher low to form above 5000 before opening longs placing stops below that new higher low or below 5000
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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