Technicals | Jul 20 2015
By Nick Linton-Ffrost
Break above 5600 improves odds for rally to 5850 before another leg lower
Our upside view is based on the following assumptions –
- five wave move lower from 6000 to 5400 implies the corrective A wave is complete
- Break above 5600 pivot level (top of wave “i” ) and trend line break point triggers a buy with target at 5850/5900
- B wave target is derived from channel height added to break point at 5600
- 5/20 moving average cross over in a northerly direction adds weight to the upside case
- we expect the rally to take 4-6 weeks to complete which should be followed by a C wave to 5300 (where C=A)
- view contingent on XJO not trading below 5550 for more then 2-3 days
Alternative view – trading below 5550 for over 2-3 days improves odds for a flatter B wave structure. In this case we would expect 3-5 weeks of sideways trading between 5400 and 5600 before a break lower to 5100.
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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