snippets from my weekly stock market report, page-5

redbacka,

Good post.

(XAO figures below).

Actually a very good point you make about the break from the wedge on the daily. Using the wedge as a basis for a target - top is at 4300, break out at 3600 gives around 2900 (but when?).

Now some rambling and a chart.

Do we just fall from here to 2900 this week or do we rally back and retest the bottom of the wedge (ie. channel edge) - now around 3550.

Importantly this week is month-end. So I'm looking again at the monthly chart (see below) for a likely level on Friday. IMO XAO needs to close below 3425 at a minimum or this move down is incomplete. If we are above 3425 then it means a month-end close below that level IMO must be coming in a later month (December?).

Ultimately though I think XAO actually needs to lock in a month-end close of about 3000. This was a clear 4 year support level on the monthly chart and looks the logical target. What I'm not so confident about is the timing. Whether it's actually this week or part of an extra leg down in a later month. And the reason for this is 3400 is effectively the equivalent of 6400 on the way up, whereas 3000ish is the 6800 equivalent. We had a big drop from 6400 before running up to 6800. So perhaps we could be doing the same thing here, a rally for a while before the last little leg down.