Talking Points:
- The ASX 200 appears to have rejected prices above the range top resistance at 5,380
- The index might need to clear short term support at 5,300 for further momentum
- Long term up-trend may be resuming if the index finds upside conviction
The ASX 200 is nudging lower (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.
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 index appears to have rejected prices above the 5,380 range top resistance at the moment, but may need to clear short term support at 5,300 on a daily closing basis to gather further downside momentum. If conviction is found, focus might 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 above 5,300, this might imply buying pressure which may signal further tests of the range top resistance 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 24, 2016
--- Written by Oded Shimoni, DailyFX Research
To contact Oded Shimoni, e-mail instructor@dailyfx.com
