Talking Points:
- The ASX 200 currently trades above key resistance levels at 5,380-5,400
- The index might need to hold above those levels for further momentum
- Long term up-trend may be resuming if the index finds more upside conviction
The ASX 200 is trading above a key resistance levels at 5,380-5,400 (at the time this report was written) as the index managed to hold above for three consecutive days. Price was unable to remain above those levels for two consecutive days since August 2015.
The ASX 200 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.
Some more conviction might be required though, as is seems that the price is currently stalling near 2016 highs at 5,431, after clearing prior resistance at 5,400 and the 500 day SMA.
A clear break and a hold above 5,431 may signal that the bulls have taken control, and that the long term up trend is resuming. This might put the focus on possible resistance around the 5,500 level.
However, if the breakout attempt from the long term range fails, this may expose 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 30, 2016
--- Written by Oded Shimoni, DailyFX Research
To contact Oded Shimoni, e-mail instructor@dailyfx.com
