Technicals | Feb 15 2016
By Nick Linton-Ffrost
Why the market can bounce to 5400
The ASX200 may find a foot hold around 4650 and 4800 based on both long and near term bullish indicators. If a bottom does form we will be looking for a bounce to 5400 over the next 2-3 months.
We have pulled out monthly, weekly and daily charts to illustrate our indicators however we require the following signals before increasing conviction on our call
- Move above near term break level at 4900
- Higher low forming between 4650 and 5000 over the next 5-10 days
- Break above 5080
Monthly Indicators (chart 1)
- Target derived from break below the 4000 to 6000 trend channel = 4650-4800.
- trend line up from GFC lows at 3130 may provide a rough measure of support
- descent from 6000 to current levels may be a major 4th wave which implies a 5th wave bounce to come
Weekly Indicators (chart 2)
- we are marketing the top of the 4th around 5400
- the major 4th breaks down into five minor waves
- where wave ‘5’ approximates the length of wave ‘1’ around 4750
- indicates that minor wave (iv) and major ‘3’ have completed their move
- which improves odds for a bounce to 5400 based on 5th completion rule (rally to top of 4th once 5th complete)
Daily Indicators (chart 3)
- the overlapping structure in wave (v) indicates reduced downside momentum
- the break below the zig-zag rally from 4750 to 5080 implies a target around 4700
- this near term target achievement may be enough to create a turning point
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.
