Technicals | Aug 15 2016
By Nick Linton-Ffrost
Upside target around 5750 remains in play while 5400 support holds
We suspect the ASX200 (XJO) has or is near to completing a minor fourth wave up from 5025 which implies a minor fifth wave rally towards 5750 (where ‘v’ = ‘1’) is on the cards. Our view is contingent on wave ‘iv’ holding above 5400 and if the plan comes together we will be expecting the 5750 target to be achieved over the next 10-15 days.
Our view has room for a pull back to 5425, however trading below 5475 for more than 3 days would turn the odds in favour for a drop to 5300. A rally above 5570 would indicate that wave ‘iv’ has more than likely completed its move and trigger the next leg higher.
It is worth noting that our near term target coincides with the bottom end of our medium term target range between 5750 and 6000. Our medium count assumes that the drop from 6000 to 4750 was a major (4) which implies a major (5) rally towards 5750 – 6000.
This range is derived from adding the height of the 10 mth trend channel (brown) added to the 5150/5200 break point (5750 is 75% of the channel height and 6000 is 100%).
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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