Technicals | Sep 14 2015
By Nick Linton-Ffrost
5250 and 5025 are the levels to watch over the next week
The question is whether or not the market has carved out a bottom which implies a bounce to 5500 or formed a bearish triangle (4th wave) which indicate a dip towards 4600. Trading above 5250 should improve the odds for the bottoming scenario while trading below 5025 should trigger a downside move.
Bottoming view (Chart 1)
- the “C” wave within the decline from 6000 has completed it’s move at 4800 where “C” approximates “A”
- bounce from 4800 to 5300 is wave one followed by a higher low forming at 4980 (wave 2)
- trading above 5250 indicates that a third wave rally towards 5500 is underway (i.e. where wave 3 approximates wave 1)
View is contingent on the ASX200 (XJO) holding above 5000Â and breaking above 5225 within the next 2-5Â days
Bearish Triangle (chart 2)
- the move lower from 5700 to 4800 is the third wave within a decline from 6000
- the last two weeks trading has formed a 4th wave (triangle pattern) where a break below 5000 triggers a move to 4800 and 4600
- the 4800 target is the previous low at 4800. The 4600 is the height of triangle subtracted from the break point around 5025
View contingent on the XJO remaining below 5325 and dropping below 5000Â within the next 2-5Â days.
Â
Â
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.
 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.
