It essentially tracked the ASX200 (XJO) today, both a good and a...

It essentially tracked the ASX200 (XJO) today, both a good and a bad thing. Shame it didn't track it better yesterday. The pattern on the XJO is for a further rise on Monday, but the CSL pattern is little more complex to interpret.




On the face of it we have a completed downwards 5 step impulse turning into a rising wave that looks like it could be a rising impulse pattern, BUT we are not yet at the point where we can confidently say that. I would have preferred it to complete wave 1 and 2, starting wave 3 today, but instead we got a strong wave 1, convincing reversal hammer candle in the morning, becoming weaker late afternoon, but no clarity on a wave 2 (downwards wave)... So at this point we may have simply completed the A wave of a fall, be entering the rising B wave and yet to hit a falling C wave of a correction pattern, These patterns come as 5 3 5 wave cycles. 5 down 3 up 5 down. Now I don't think that is what we are looking at as by my count this last drop was wave 5 of a C wave - which is why I had a projection of a turning point 237.5, but I can't say I am instinctively happy about the shape of the wave over the last 2 hours of trade. It hasn't really retraced enough fast enough, and it hasn't risen enough. We should get at least one more rise if it is going to be a 3 step correction wave, but then it would plunge lower than 23200, Because it hung around at this level for too long, if it retraces much more now it is likely to trip the 10 min EMA cross, unless it is fast and recovers equally quickly on Monday. It's just not in the right place right now for any clarity, but there are a bunch of TA indicators that are positive, but they were this morning, and it is looking like it will wait for the US lead over night and maybe follow the ASX200 on Monday.

It didn't come off as much as the 200 did today, and it did better than the market over all - which is a good thing, but not quite as well as it might have needed to.

On the other hand, if it breaks below 230 at this point the implications for the ultimate destination are simply ludicrous, so it seems very unlikely to me that this is credible, hence I am of the view that the likely short term destination is still up. I hate these points where a stock decides to be half pregnant... but that is where we are at.

TA at this point says it should go up more, but it is a little weaker than we would like, and instinct doesn't like the feel of the pattern at this instant in time. The problem is that if Monday's candle is red and closes below 244 we have a short signal, whereas a close above 250 gives us a strong buy. Very tricky right now.