Talking Points:
- AUS 200 Strategy: Adjust stops if resistance levels prove challenging
- Topside developments head to 4918.4 then 5074 resistance
- Strong momentum drives price action
The rebound in AUS 200 strengthens as it is heading to a previous triple bottom at 4918.4. Momentum signals indicate a strong topside buildup at present. In medium term, ranging action likely continues in absence of trend signal.
It will be good news to bullish investors if the index comes to challenge 4918.4 resistance or breaks through it. Traders with long positions could align their stops around 4918.4, or 5074 resistance above that.
As AUS 200 approaches these levels, it will become sensitive to downside market developments that may hinder the ascension. Hence traders should also monitor any change of direction in other regional indices like the Nikkei.
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Daily Chart - Created Using FXCM Marketscope
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--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh
