ASX 200 Heading Lower after Breach of Support
- Strategy: Adjust stop loss if the index declines further
- Downward momentum strengthened after previous support was broken
- New support comes at 4918.4
The ASX 200 declined for the fifth straight session today after it broke through the 5074 support level. Strong downward momentum hints at further downside development. A new immediate support level comes at 4918.4.
Investors are waiting for large dividend payouts scheduled for this Friday, which may lead to lower prices ex-dividend. Investors in the Nikkei index already experienced such situation today.
Traders with short positions should keep watch of the previous support level - now turns into resistance - at 5074 to adjust their stop loss if need be. Those who look to sell upon a downtrend or for range trade may find opportunities if the index closes below 5074 level today. All signs point to lower moves for now.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Nathalie Huynh, Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.