Technicals | Mar 21 2016
By Nick Linton-Ffrost
Our 5400 target remains in play while support at 5050 holds
We suspect the market is trading within a corrective rally which should carry to 5400 over the next 5-10 days. From there we will be looking for a pull back to 5200 before another leg higher towards 5700. Our view is based on the following assumption and is contingent of the XJO holding above 5050.
- the break above the head and shoulders pattern at 5050 implies a 5400 target
- the five wave completion down from 6000 implies a bounce to 5400 which is the top of wave’4′
- 5440 is where wave ‘3’ equals 1.618 the length of wave ‘1’
- the 50% retracement of the descent from 6000 to 4700 is 5380
A confirmed break above the 12 month trend line down indicates a target around 5700 (i.e height of the channel added to the 5200 break point).
Trading below 5050 for more than two days negates our view and should set up a drop to 4800.
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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