ASX200 Analysis August 2015 (W,M)
Created on Saturday, 01 August 2015 02:20
Written by Austin Galt
We know we have a solid top in place so let’s review the weekly and monthly charts to see where things currently stand.
ASX200 WEEKLY CHART
We can see the parabolic rise into high which ended with a bearish quadruple top. Price now looks headed up to put in a major secondary high.
I have added Fibonacci retracement levels of the move down from high. The first rally in a new bear trend often makes a deep retracement which brings into the picture the 76.4% level at 5852. However, given we have the very bearish quadruple top formation in place I suspect this rally may not get that high. Perhaps price may only clip the 61.8% level which stands at 5762. Perhaps somewhere in between??
The Stochastic and MACD indicators are both bullish suggesting further upside from here is likely.
The PSAR indicator has a bullish bias with the dots underneath price so no qualms there.
The Bollinger Bands show price currently around the middle band while I expect the secondary high to be around resistance from the upper band.
Once that secondary high is in place the downtrend should resume.
ASX200 MONTHLY CHART
We can see the recent high was right around resistance from the 76.4% Fibonacci retracement level of the move down from 2007 high to 2009 low. Nice.
This high was accompanied by a triple bearish divergence on the RSI. Nice.
The MACD indicator now has a bearish bias and I expect lower price going forward from here.
The Bollinger Bands show price moving away from the upper band to now be milling around the middle band as it readies itself for a move to the lower band.
The PSAR indicator has a bearish bias while price now looks headed up to give this resistance a test. These dots are likely to be around 5900 in August and I expect that resistance to hold.
As noted in previous analysis, I am looking for price to get smashed in the order of around 30% which would see price get down to around 4200. The 2010 low at 4175 which is denoted by the horizontal line looks to have some good support potential in my opinion.
Summing up, once the expected secondary high is in place we should see a resumption of the bear trend with it gaining momentum.