ASX 200 Technical Analysis: Index Reverses After Setting 2016 High
- The ASX 200 held below a range top resistance at 5,380
- Long term up-trend may be resuming if the break-out finds follow through
- A failure to hold above 5,380 might imply a move lower
The ASX 200 posted a new high for the year and broke the range top at 5,380 before quickly reversing lower. The price has been trading for the past 9 months in a well-defined range between the 5,380 resistance and the 4,750 support, which coincided with the 0.618 Fib level of the long term up trend from 2012.
Follow-through from the breakout above resistance appears lacking at the time of writing, but the index may gather momentum if other correlated “risk assets”, such as the S&P 500, find strength. A break, and a hold above the range top at 5,380 might imply that the bulls have taken control, and that the long term up trend is resuming.
With that being said, if the 5,380 level continues to contain price inside the range, this may imply that a move lower is of higher likelihood, which might put the focus on the 5,200 support zone.
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ASX 200 Daily Chart: May 11, 2016
--- Written by Oded Shimoni, DailyFX Research
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