Technicals | Oct 26 2015
By Nick Linton-Ffrost
Levels to watch are 5420 and 5250
Breaking above 5400/5450 for a week implies a 6000 target over the next few months. If the ASX200 (XJO) remains below 5450 and trades under 5250 for a few days we expect a move south towards 4600-4800.
Bottoming view
- the decline from 6000 to 4800 is a major 4th wave within the 3 years' rally
- correction is complete given the 4th breaks down into three minor waves (abc)
- trading above the bottom of wave “a” creates wave overlap and adds weight to the bottoming view
- the 6000 target is derived from the height of trend channel added to the expected break point at 5450
Bearish view
- the XJO is currently trading within the 4th wave in the decent from 6000, which implies a 5th wave lower is just around the corner
- if the market rolls away from 5400/50 and trades back under 5250 that would indicate that 5th is underway
- the 5400/50 level is significant given that is where wave “c” equals “a” and it is the bottom of the previous wave “a” (yellow)
- trading below 5150/5250 creates a bearish zig-zag and implies a move to 4600 (height of pattern less break point)
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.
AFSL 319830 | Disclaimer
Reprinted with permission of the publisher. Content included in this article is not by association the view of FNArena (see our disclaimer).
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.