Technicals | Jun 29 2015
By Nick Linton-Ffrost
Fresh break lower, or is the market finding a foothold?
Break lower – The assumption is that the market is trading in the 5th wave of the decline from 6000 after breaking below the two week trend line. We have two targets in mind for the bottom of the 5th wave. The trend line break is 5425 (height less break point) while the wave count target is around 5300 (i.e where 5th = 3rd). The 5th wave approximating the 1st cannot be applied in this case given the 3rd cannot be the shortest wave. Trading above 5600 for more than two days negates this view.
Foot hold – the market has completed a corrective move lower from 6000 to 5425 given the three wave structure. Therefore the recent decline is simply a correction which should last around 5 days (b wave) before another rally towards 5800 (c wave). This view is contingent on the market remaining above 5425 and pushing back above 5600 within the next week.
Another trading idea from
Fifth Wave | fwtc.com.au
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