ASX 200 Technical Analysis: Crucial Decision Point For The Index
- The ASX 200 held short term support at 5,300 and currently trades above 5,380
- The index failed to hold two consecutive days above 5,380 since August 2015
- Long term up-trend may be resuming if the index finds more upside conviction
The ASX 200 is trading above 5,380 (at the time this report was written) as price appears to attempt a break out of a long term range.
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 was able to hold above short term support at 5,300, and initiated what seems like an attempt to break out of the range. The price closed above the 5,380 level yesterday and moved lower today only to quickly reject and move above again.
If the index manages to close for a second consecutive day above 5,380, it will accomplish that feat for the first time since August 2015. Some more conviction might be required though, as is seems that the 5,400 level and the 500 Day SMA are other technical hurdles in the way.
A clear break and a hold above 5,380 might signal that the bulls have taken control, and that the long term up trend is resuming.
However, another failed breakout attempt might expose the short term support at 5,300, followed by the 5,200 support zone, from which it appears the move to the upside was initiated.
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ASX 200 Daily Chart: May 26, 2016
--- Written by Oded Shimoni, DailyFX Research
To contact Oded Shimoni, e-mail firstname.lastname@example.org