Footsie Broadening Top (D,W)
Created on Wednesday, 25 March 2015 00:31
Written by Austin Galt
Since the last report which called for a top, price dropped steeply before finding support and rising from the ashes to surge to new all time highs. Let’s take a quick look using the daily and weekly charts.
FOOTSIE DAILY CHART
We can see price recently declined before reversing back up to new highs. This sets up a 5 point broadening top formation. I really should have foreseen this setup as I have noticed it in many other markets I follow. Anyway, price now looks to be in the process of putting in the final point 5 high.
We can see price came down and found support around the 50 period (blue) and 100 period (red) moving averages. Price rallied from there which keeps these averages in a bullish formation.
The Bollinger Bands show the point 4 low was well outside the lower band which is commonly found at lows. I’d like to see price now get back up to the upper band.
The Relative Strength Indicator (RSI) is looking strong and I’d like to see the final high show a weaker reading here.
The Moving Average Convergence Divergence (MACD) indicator is now trending up and looking bullish.
FOOTSIE WEEKLY CHART
We can see the recent low was right at support from the middle Bollinger Band. I’d like to see price get back up to the upper band now to put in the final high. The upper band is currently around 7150.
The recent low also found support at the dots from the Parabolic Stop and Reverse (PSAR) indicator so a bullish bias is retained.
The RSI looks like this coming top may set up a bearish divergence.
The MACD indicator made a bearish crossover on the recent move down but this proved to be a fake out and this indicator is back to a bullish bias and trending up.
Summing up, I still believe a final high is close at hand with only a touch higher to go.