Talking Points:
- Index trading at a resistance zone below 5,600 after a push higher
- Price has been trading sideways between 5,500 and 5,570 since the beginning of the month
- 20-day ATR readings still at lowest level since September 2014
Learn good trading habits with the “Traits of successful traders” series
The ASX 200 is edging higher at the time of writing, trading at a potential resistance area highlighted in the last reports between 5,570 and 5,600.
Volatility has seen a decline to its lowest levels since September 2014 (based on a 20-day ATR study), perhaps on the backdrop of the “summer lull”.
With that said, a break to either side of this short term sideways trend could induce a pickup in activity as some participants might get caught on the wrong side.
At this stage, focus seems likely to be on the 5,600 level; interestingly, OBV is showing strength relative to price action.
A clear move above 5,600 could indicate the long term uptrend may have resumed and signal further bullish intentions, possibly exposing the 5,700 level initially for potential resistance.
A break below the 5,500 area might shift focus to possible support around the 5,380-5,400 levels.
ASX 200 Daily Chart: August 24 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
To contact Oded Shimoni, e-mail oshimoni@dailyfx.com
Follow him on Twitter at @OdedShimoni
