Emerging Buy In Woolies

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

By Nick Linton-Ffrost

Emerging Buy

We expect Woolworths ((WOW)) will bounce towards 34.50 over the next 2-3 weeks after achieving downside break targets.

Our view is based on the combination of wave count assumptions, trend line break targets and Friday’s reversal day. We suspect that the sell-off from 39.00 to 31.00 has traced out 5 waves which improves the odds for a near term bounce. In addition WOW has now achieved the break targets derived from the trend line break at 35.50, these levels can create strong reversal levels.

It is also worth mentioning Friday’s strong reversal signal (ie new lows followed by close on highs). This price action when combined with our previous assumptions significantly improves the odds for a corrective rally. We therefore suggest looking for buy signals over the next 3-5 days such as a higher low or a series of three days with higher highs and lows. Trading below 31.00 for more than 2-3 negates our view.

Trading tactics

Wait for buy signals.
 

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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