Talking Points:
- ASX 200 plunged after failing to hold above the 5,380 level
- Index found support around 5,200 and formed a bullish reversal pattern
- Gains capped below 5,300 at this point in time
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The ASX 200 is edging higher today, but having difficulties trading above 5,300 at this time.
The index was trading in a well-defined range between the 5,380 resistance and the 4,750 support until July saw a breakout higher. The failure to hold above 5,380 meant a return to trading in that range.
After forming what might be perceived as a bullish morning star pattern around the 5,200 support, bulls hopes might have been rekindled, but at the moment it seems like the index is having difficulties posting a close above 5,300.
A break above 5,300 seems likely to have eyes on 5,380-5,400 for potential resistance, but as long as that area holds, pressure seems to be to the downside.
A move lower might shift focus to 5,200 for possible support while the low around 5,100 seems important after the index recovered from that area following Brexit.
ASX 200 Daily Chart: September 20, 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
