This played out almost exactly in line with expectation as the market first moved sharply higher breaking through the 49,000 level with this proving a false break as it then with a similar level of alacrity moved downwards ending the week in the red. Looking at the weekly candle, we see that reversal candle coming off the upper bollinger bad with the weekly stochastic now looking decidedly bearish as it looks to reverse form overbought levels.
On the daily chart, the week-end reversal is clear in Friday's bearish candle. The stochastic also looks like it has some room to fall as it moves downward.
The daily support and resistance doesn't add much to the analysis at the moment other than to highlight the fast-approaching major support level between 47,000 and 47,500 or thereabouts. Its going to be important for this to hold in the days ahead.
Our plan at the start for the week is then to again revert to quick profit taking on any long positions taken on the T40 with an eye on a break of major support which could see the flood-gates opening to the downside on the short-side.
A nice little bounce off the 47.500 level as the support band holds for now. The daily stochastic also moved down quite sharply although not oversold yet. We may see the 47,500 barrier tested again and again a hold in that range will be important
ReplyDeleteAnother sharp move down has pushed the daily stochastic into the oversold territory and we are now pushed firmly against the strong blue support line noted in the chart above. There's probably a fair chance for a bounce here but if it breaks down here we need to start dusting off some downside support levels.
ReplyDeleteA very tight trading range yesterday reflects some uncertainty coming through as the T40 downward momentum stalled with the daily candle almost forming a doji and the stochastic flattening in oversold territory. On an end of day basis there is a very small bounce off major support with no real energy behind it and any negativity coming through today could see us start to break downward
ReplyDeleteAnother bearish engulfing day and we've broken through some major support as at the close and we're now going to regard the 47,000 level as overhead resistance. The daily stochastic is now deeply oversold but is showing little evidence of slowing downward momentum. As we move into the weekend there is a high probability of further downside on the cards unless some left field trading action can falsify the break
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