Technicals | Sep 07 2015
By Nick Linton-Ffrost
5350 and 4780 are the levels to watch over the next 5-10 days
The question for us is whether or not last week’s ASX200 (XJO) trading is part of a 4th wave structure which implies a 5th wave to 4650 or has the market completed a correction which would improve the odds of recovery rally to 5700.
Bottoming view = bounce to 5700 (Chart 1)
- major 4th wave lower from 6000 terminated at 4780 where “c” approximates “a”
- strong support between 4750 and 5000Â will create a reversal level based on the
- strong reversal week at the end of August, the 6 year trend line and top of a the 2010-2011 trading range
View is contingent on the XJO holding above 4780 and breaking above 5350 within the next 5-10 days
Continued downside = 4650 (chart 2)
- where the move lower from 6000 morphs into five wave correction
- where the drop from 5700 to 4780 is a third wave which may or may not be complete
- if the 3rd is complete then last week’s trading is a part of 4th wave which implies a 5th to 4650
- if the third wave is still in progress then downside targets extend to 4400
View contingent on the XJO remaining below 5350 and the move lower needs to start within the next 5-10 days or the market trades below 4900 for more than 3 days.
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Another trading idea from
Fifth Wave | fwtc.com.au                                             Â
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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