Talking Points:
- The ASX 200 is trading around range top resistance at 5,380
- The index moved higher after rejecting the same level last week
- Long term up-trend may be resuming if the index finds upside conviction
The ASX 200 is trading higher around long term range top resistance at about 5,380-5,400. After posting a high for the year last week, the index appeared to reject the 5,380 level, but has since seem to have found willing buyers in proximity to resistance for what might be another breakout attempt.
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.
The ASX 200 appears to be edging higher at the time of writing, but in order to see further upside momentum, the index might need to see the 5,380 resistance level turn into support and hold. Other correlated “risk assets” may need to find positive directional conviction as well. If that’s the case, a hold above 5,380 might signal that the bulls have taken control, and that the long term up trend is resuming.
However, another decline below 5,380 may put the focus on the 5,200 support zone, from which it appears the move higher was initiated.
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ASX 200 Daily Chart: May 17, 2016
--- Written by Oded Shimoni, DailyFX Research
To contact Oded Shimoni, e-mail instructor@dailyfx.com
