Technicals | Oct 12 2015
By Nick Linton-Ffrost
Targets at 5420 and 5750
Last week's move above 5150 implies a move to 5420 over the next 1-2 weeks. We suggest buying dips around the 5180 over the next few days placing stops under 5050 and looking to exit around 5420.
The 5420 level is derived from the following –
– break target at 5420 ( height of pattern added to break point at 5150)
– line down from 6000 provides a measure of resistance around 5450
– bottom of wave “A” = 5400
Trading above 5420 for a week or two would indicate that the “ABC” correction from 6000 to 4800 is complete and the medium term trend has turned north. In other words the last two month's trading is not a 4th wave structure which implies a fifth wave lower. The reasoning here is twofold –
– trading above the bottom of wave ‘A’ would create overlapping waves which implies the move from 6000 – 4800 was a correction not a trend change
– breaking above the line down from 6000 indicates a move to 6000 (i.e height of trend channel added to estimated break point around 5420)
Alternative view – trading below 5100 negates our view and turns the odds in favour of a retest of 4800 and 4600.
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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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