Woolworths At Critical Level

This story features WOOLWORTHS GROUP LIMITED. For more info SHARE ANALYSIS: WOW

By Nick Linton-Ffrost

Trading tactics

Watch the price action between 35.50 and 37.00 over the next 5-10 days for the next clue.

Rationale

After breaking out of what appears to be a triangular pattern Woolworths ((WOW)) is testing the 12 months high near 37.00. We suspect this level will provide strong resistance first time around and should produce a pull back towards 35.00-36.00. After that pullback we slightly favour a 5th wave rally to the triangle target around 39.00.

Before trying to capture this 5th wave move we need to wait and see how the 4th wave pull back reacts. This view is contingent upon 34.50-35.0034.50-35.00 support holding.

The alternative scenario is to argue that WOW remains range bound between 32.00 and 37.00 and therefore looking for shorting signals at current levels is the way to go. Before trading this view we suggest waiting for lower highs to form between 36.00 and 37.00 and then looking for a move back to the midpoint of the pattern around 34.50.

 

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 27years experience.

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