Author: Vin Coco, participant of the Analyst Contest
The index is trying to close today’s action with purchase recovery. Although the medium-term trend is still set to the downside, today’s close seems to confirm a temporary stop, with the possibility of an upward move in the following days.
Elements to be considered for the Trading Forecast (Technical Analysis):
- Side by side Bullish Candle Pattern, 3 x Bullish Engulfing (green arrows);
- The Candle Patters is at Multi-tested Turnaround Support (Old Resistance has now became Support);
- The 6100 Round number is acting as Support;
- Rising channel/trend line is supporting price (Blue dotted line);
- Risk:Reward is 2:1 for the 2nd target; (purple arrow on the right);
- The possible bounce is at about 32.8 Fibo retracement;
- Stochastic Divergence;
- The Price has closed above the EMA (green line);
- SMA 20(blue) and 50 (red) are still set in Bullish configuration;
- On W chart (Image nr.2) the target converges to the upper side of the Descending Channel (in dotted red) and the Resistance Zone bounded by the blue rectangle.
- The long term trend has still a negative bias;
- The price is still in a box range;
- The worst R:R scenario has only about a 1:1 ratio (leftmost purple arrow);
- The SMA200 is still above the price and can “compress” it to the downside;
- The area 6180-6200 (round number) could act as Resistance;
- On Weekly chart (medium-long term) the SMA 200 and SMA20-50 are set in Bearish Mode.
Any comments and suggestions below are very welcome.