The Aussie stock market’s ASX-200 index has pierced below a daily support trend line that had been in play since the beginning of this year. This suggests some potential bearish follow-through and, with this in mind, I’ve checked over the XJO index charts to identify possible support levels.
XJO: S&P/ASX-200 monthly: the monthly chart shows a longer-term support trend line is still in play. Note how any further test and hold of the 5,200 region would help to develop a potential bullish-reversal ‘Inverse H&S’ pattern:
XJO: S&P/ASX-200 weekly: the weekly chart shows how a smaller triangle had been developing within this larger monthly chart triangle pattern. The support trend line of this smaller triangle was broken after Friday’s close though and suggests some bearish follow-through.
XJO: S&P/ASX-200 daily: The daily chart shows that this triangle trend line had been in play since the beginning of the year and the break of this support suggests that there could be some bearish follow-through. Placing Fibonacci retracement on the last swing high move might help to identify targets for any bearish continuation and I note the following levels that I think are worth watching:
- the 5,200 S/R level.
- the 50% fib near 5,160.
- the 61.8% fib near 5,050.
- the 78.6% fib near 4,900 and also near the monthly chart’s triangle support trend line.
Summary: a daily support trend line that had been in play on the XJO index for most of this year has now been broken. Watch key S/R and Fibonacci levels for reaction with any bearish follow-through.
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