14 March 2016
We can see an interesting weekly candle painting off last week's trading action as the stochastic continued to move firmly upward towards the overbought zone (albeit not there yet). The candle in question has a relatively long tail and wick, reflecting a degree of indecisiveness as the bulls and bears struggled to take control. As a follow on to the previous week's strength, it was perhaps not unexpected and we included some commentary around envisaged consolidation in our post at the beginning of last week. The question now is whether the uptrend will resume or whether the bears will try to use this as an opportunity to start forcing a reversal of the past few weeks' worth of market strength.
To try and answer this we now drill down into the daily charts we can see the stochastic continuing its downward move from overbought conditions. Against this, Friday's candle was certainly more bullish than would be expected in a clear-cut retracement or reversal but again we see the relatively long wick and tail in almost a fractal imitation of the weekly candle. In fact with a couple of days of long wick candles being painted at the tail-end of last week, it could be seen as the bears really losing some momentum on their retracement journey with the bulls pushing back hard over the past 2 trading sessions.
Where we appear to find ourselves then is in a trading zone between about the 45,000 and 46,300 levels and our expectation is for continued volatility within that zone with a break above the red resistance zone or a break below the blue support zone being needed to provide some clues as to the next direction this market takes. Given the size of this trading zone, it could be a good opportunity for intraday trades to yield some positive outcomes.
On the portfolio front, no changes were made on Friday and with 2.3% downside risk in play at a 2.77 reward-risk target, we're fairly comfortably positioned. We do have an eye on a potential GRT trade though with watchlist stocks for the day being ZED and AIP.
**********************************************
We can see an interesting weekly candle painting off last week's trading action as the stochastic continued to move firmly upward towards the overbought zone (albeit not there yet). The candle in question has a relatively long tail and wick, reflecting a degree of indecisiveness as the bulls and bears struggled to take control. As a follow on to the previous week's strength, it was perhaps not unexpected and we included some commentary around envisaged consolidation in our post at the beginning of last week. The question now is whether the uptrend will resume or whether the bears will try to use this as an opportunity to start forcing a reversal of the past few weeks' worth of market strength.
To try and answer this we now drill down into the daily charts we can see the stochastic continuing its downward move from overbought conditions. Against this, Friday's candle was certainly more bullish than would be expected in a clear-cut retracement or reversal but again we see the relatively long wick and tail in almost a fractal imitation of the weekly candle. In fact with a couple of days of long wick candles being painted at the tail-end of last week, it could be seen as the bears really losing some momentum on their retracement journey with the bulls pushing back hard over the past 2 trading sessions.
Where we appear to find ourselves then is in a trading zone between about the 45,000 and 46,300 levels and our expectation is for continued volatility within that zone with a break above the red resistance zone or a break below the blue support zone being needed to provide some clues as to the next direction this market takes. Given the size of this trading zone, it could be a good opportunity for intraday trades to yield some positive outcomes.
On the portfolio front, no changes were made on Friday and with 2.3% downside risk in play at a 2.77 reward-risk target, we're fairly comfortably positioned. We do have an eye on a potential GRT trade though with watchlist stocks for the day being ZED and AIP.
To try and answer this we now drill down into the daily charts we can see the stochastic continuing its downward move from overbought conditions. Against this, Friday's candle was certainly more bullish than would be expected in a clear-cut retracement or reversal but again we see the relatively long wick and tail in almost a fractal imitation of the weekly candle. In fact with a couple of days of long wick candles being painted at the tail-end of last week, it could be seen as the bears really losing some momentum on their retracement journey with the bulls pushing back hard over the past 2 trading sessions.
Where we appear to find ourselves then is in a trading zone between about the 45,000 and 46,300 levels and our expectation is for continued volatility within that zone with a break above the red resistance zone or a break below the blue support zone being needed to provide some clues as to the next direction this market takes. Given the size of this trading zone, it could be a good opportunity for intraday trades to yield some positive outcomes.
On the portfolio front, no changes were made on Friday and with 2.3% downside risk in play at a 2.77 reward-risk target, we're fairly comfortably positioned. We do have an eye on a potential GRT trade though with watchlist stocks for the day being ZED and AIP.
**********************************************
No comments:
Post a Comment