Technicals | May 08 2010
By Rudi Filapek-Vandyck
Not that technical support and resistance levels count for anything at times of panic selling -see for example how easily they gave in during the mid-January sell-down- but the TechWizard has put in the effort in trying to pin down which levels investors should be paying extra attention to.
He observes that, despite this week's carnage on the local share market, the 20 moving average is still trending upwards, albeit only slightly so. This, he explains, is actually a good sign. It certainly gives him hope that the share market might be close to finding a bottom.
It is his view that the next level of support to watch out for is 4250 for the ASX200. (Note: other chartists continue mentioning 4500 and then 4400 as the levels of support to concentrate on).
If 4250 is broken to the downside we might be in for some serious weakness, predicts the Wizard, as that might shift the market's focus to 4000, and potentially (much) lower.
The TechWizard is the pseudonym of Scott Morrison, whose experience in financial markets exceeds twenty years. Morrison operates his own website nowadays at www.techwizard.com.au
Trading short or short selling is as easy as going long these days with CFDs. The techwizard is running a "Day Trading the SPI/ASX CFD indices" webinar on the 27th may which will show investors how to short sell the market , go to www.techwizard.com.au for more information.
