Sunday, October 11, 2015

Top 40 Perspectives - 11 October 2015

The Weekly Top 40 graph reflects the significant recovery the market has undergone in the past couple of weeks and with the stochastic looking decidedly bullish and not overbought as yet, it seems that we may see the market test it's all time highs reached in April of this year.


The daily chart also makes interesting viewing as here we do see the stochastic moving oversold with the potential for short-term reversal as the market consolidates. However, with the 21EMA crossing above the 89EMA market pullbacks could now provide buying opportunities again.

Support and resistance clearly shows the break through lateral resistance and the expectation would be that we see a throwback to this level as price consolidates and resistance changes to support.

Lastly, we look at the 3LB graph where we can see the break of the previous swing high on 08 October 2015.  This view also beautifully highlights the overhead resistance level which was broken.

Putting some interpretation to all of this, there is the potential for a short-term pullback to support as the T40 consolidates in the near-term but if that level holds, a move back up to the all-time high level around the 49,100 would not be surprising.
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4 comments:

  1. UnknownOctober 12, 2015 at 8:38 PM

    The expected pullback kicked off today as the market moved steadily downwards towards the support level. With the daily stochastic starting to cross downward from overbought levels, the next couple of days' trading action will be important to see whether the support level which is between 47,000 and 47,500 holds.

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  2. UnknownOctober 13, 2015 at 7:55 PM

    The market still remains overbought but the SAB movement on the day effectively muted a potential short-term reversal and prompted a small bounce off the support level noted above. The lack of pervasive strength means that the bounce is not very convincing though and there is the likelihood of continued consolidation and chop around the support level in the days ahead.

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  3. UnknownOctober 14, 2015 at 8:49 PM

    The anticipated chop played out on the day with a spinning top daily candle painting and highlighting the market uncertainty playing out. Importantly though the major support level continues to hold and if this persists as the stochastic works off its oversold condition, that potential move back up to all-time highs as noted above remains in in play

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  4. UnknownOctober 15, 2015 at 7:44 PM

    Another inside as the sideways move continues. A bit of a bullish pennant potentially forming here though.

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