Technicals | Aug 10 2015
By Nick Linton-Ffrost
Downside targets at 5380 and 5100
Last week's break below 5600 for the ASX200 indicates that the corrective rally from 5380 to 5730 is now complete, which increases the odds for an extended decline to 5100 over the next two months. Assumptions as follows –
- the rally from 5100 in December to 6000 in April is a major fifth wave within the three year rally from 4000 to 6000
- the implication is for a three legged correction to the bottom of the major fourth wave at 5100 (bottom left corner of chart)
- wave A from 6000 to 5380 is the first leg within this downside correction view
- and last week's drop below 5600 indicates the B wave is also complete
- therefore the implication is for third leg lower (C wave) towards 5100 where wave C = A and bottom of (4)
Alternative view – the market finds support at the June lows around 5380 which is also the trend line break target (i.e. the height of B wave channel less break point at 5600). Under this scenario we would expect a 1 month trading range between 5380 and 5725.
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.
