The two main Australian stock indices, the XAO and XJO, have made bullish weekly-chart triangle breakouts. The XAO is the Australian All Ordinaries Index whereas the XJO covers the top 200 Aussie stocks. I alerted traders to these triangle patterns back in December and gave an update in early January. Triangle breakouts on both were achieved at the close of last week’s trade.
The advice back in December was to watch for any triangle breakout with momentum. Last week’s weekly candle closed above the triangle trend line on both the XAO and XJO and the ADX mometum line is edging above 20. As well, selling momentum waning and buying momentum is on the increase. Follow-through buying is evident already although today marks the first day of trade for this week:
XAO weekly: The next major S/R level is the 78.6% fib near 6,000:
XJO weekly: The next major S/R level is the 78.6% fib near 6,000:
Summary: The XAO and XJO stock indices have both made bullish triangle breakouts. I will be watching for bullish continuation towards the 6,000 level given that is the next major Fibonacci resistance level (78.6%). Watch for bullish activity on stocks that make up these two indices.