This post covers the ASX 200 (the Australian top 200 companies) the Ric code is XJO.
Lets look at the chart:
Again like the DJI chart we have two well known chart patterns for reversals, Double Top and head and Shoulders. The major pattern is the double top noted as 1 & 2. The measurement from the top to the neckline is 505 points.
You can clearly see how the XJO trended down to the neckline and then formed the head & shoulders (3,4,5) pattern. This new pattern was the trigger and setup for the double top to released its energy.
So the market dropped actually 711 points but bounced back up to the 505 point measurement level.
On the weekly chart , 3780 is a monthly low extension level, the market actual hit a low of 3765.90 only -14 points off. Lets look at the chart,
1. Moving averages (50,21) are still not crossed over
2.Current bar is creating a strong reversal candle called a hammer, with confirmation of a move above the high of this candle would be a buy signal.
3.Test level on the way up is 4276
4. Market bounces of RSI 30 level (cheap level), which is good.
Current day trading action indicates that regardless of the overseas issues the ASX 200 is finding a footing and shrugging off the headlines.
Enjoy.
The best Intraday no BS trading Course that I recommend is here http://bit.ly/1qqQyUY
