Technicals | May 16 2016
By Nick Linton-Ffrost
Levels To Watch
We suggest watching how the ASX200 reacts to the 5400/25 and 5200/50 levels over the next week. A break above or below those levels should determine the markets direction over the next 1-2 months.
Upside case – if the market holds 5200/50 support and spends more than 3 days trading above 5400/5425 we will be expecting a move towards the height of the resistance line target at 5700 (green markings).
Such a move would improve the odds for a rally to 6100 which is the height of the 4700 – 5400 range added to the 5400 break point (orange).
Downside case – if the market remains below 5400/5425 and trades under 5200/5250 for more than 3 days we will be looking for a dip towards 4800. Under this scenario we will be assuming that the major “C” rally from 4700 to 5425 has completed its move after breaking down into three minor waves where (c) = (a).
Trading below the top of (a) that would improves the odds for a test of the support line around 5100/50 and a break below that level would imply a 4800 height of pattern target.
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.
