ASX 200 Technical Analysis: Long Term Range Still in Play
- The ASX 200 appears to have rejected prices above the range top resistance at 5,380
- The index might remain contained inside a well-defined range
- Long term up-trend may be resuming if the index finds upside conviction
The ASX 200 is trading lower today (at the time this report was written) as price continues to trade below the 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 prices above the 5,380 level, and has since continued to do so.
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.
As of the time of writing, it seems the price is still contained inside the range, perhaps implying that a move lower is of higher likelihood. If this is the case, focus may be put on the 5,200 support zone, from which it appears the move to the upside was initiated.
However, should the index continue to hold price in proximity to the range top, this might imply buying pressure which may signal further tests of the resistance level are ahead.
A break above 5,380 might signal that the bulls have taken control, and that the long term up trend is resuming.
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ASX 200 Daily Chart: May 19, 2016
--- Written by Oded Shimoni, DailyFX Research
To contact Oded Shimoni, e-mail firstname.lastname@example.org