AUS 200 Technical Analysis: The Rebound Challenges Resistance
- AUS 200 Strategy: Prepare for acceleration if resistance is broken
- Strong upward momentum promises a return to September- January range
- Support is 4859.9, next resistance is 20-day MA at 5031
AUS 200 is testing 4998 resistance level on a second day, with the aid of rapidly building upward momentum. This resistance level has held for two weeks so expect a tough challenge around there. A clean break above it would bring the index close to 20-day moving average at 5031.
Bulls traders should keep stop loss near resistance level to preserve past gains, in case of reversal after failure to breach. At the moment all signs point to upside activity and a return to the 4998-5391.5 range that contained prices during September-January.
Support level is 4859.9, lower bound of triple bottom area. Below that comes firm support at 4754.
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--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh