A fresh update for the new week ahead. Late last week I posted a shorter term analysis that was suggesting another swing down for the end of the week. I'm happy that it didn't turn out that way and what actually happened has added good firepower for the bulls. When you have mixed signals on a chart it's always good to step back to a larger timeframe to gain some clarity. The larger TF's are the most important in the overall picture because they carry the most weight and give us the long term view. Most of us, even those who trade in and out, are here for the long hall and so the long term is ultimately what we are interested in. The intra day stuff while interesting, fun, useful and much faster, isn't going to give the big picture The last couple of weeks(and the next few) should be a good lesson for a lot of people in being able to ride out the pullbacks with confidence.My reason for confidence is firstly, the fundamental story simply doesn't get any better than IMU - Fundamentally the share price is only going in one direction. End. A second reason is the TA on the long term charts agree with the first reason. Let's have a look. Note this is an update on the quoted analysis so it will supplement those
WeeklyIn addition to previous, this weeks candle finished up looking quite good. Bears lost the battle at the end of the week leaving s nice wick under it. The close for the week has also decreased the slope of the green weighted 5 period moving average (w5). Angle is everything with the specific MA's and the method I use. If you imagine the higher period MA as water and the lower one(relative) as a stone, the stone is more likely to bounce if comes in with a shallow angle than if it was steep and go straight through the surface. If you then imagine the angle of the larger(relative) MA as water pressure pushing up(or down), it's much harder for the stone to get through than it is for the stone to change direction with the water. The larger the MA the 'thicker' the water, the smaller the MA the lighter the stone. So the w5 having changed its angle as compared to the original chart is great. The e21 will have slightly increased it's angle as well though it will be hard to see. As previously mentioned the first turn by the w5 off an angled e21 after a run will almost always been a repulsion at distance. The week even finished with the 38.2% fib as support.
161.8% at 0.740 is now the legitimate D1 fib target once we close and bounce above the high at 0.495.
DailyThe only thing I don't like about the daily chart is how good it looks. Occasionally when something looks perfect the market will give you the middle finger and do the opposite, just for laughs. Love the divergence, love the e21 bouncing off the e55 at a distance, love the increasing slope to the MA's. The e21 is basically flat so it will be easy for the w5 to cross through. We've got a fair few resistance levels to work through but nothing that should pose a major issue. Same old story, we want to see close and bounce, close and bounce
HourlyEven the hourly looks pretty good now for a bull run. There are a couple of hurdles to get past but after that its party time. The first hurdle is the bearish divergence. I don't expect it to be a major problem because the previous bullish divergence wasn't a big contributor so it should hopefully negate the influence a little. The other hurdle is the hourly s200(simple MA) - this is a big resistance level relative to the TF it's on. Unfortunately we closed on the wrong side of it. s200 is much weightier than an e200 for S&R purposes. Here is where we see the resistance levels line up for us. For those learning bits and pieces, here's a little tidbit from the method I use. Where immediate neighbour MA's (that is when the e21/e55, or e55/e100 or e100/e200) cross each other, that is where key S&R levels will be found and they will more often than not match up with other levels. So on this chart we have two - the crossing of the e55/e100 at 0.370 & e21/e55 0.405. For observation sake, watch how the price responds when it gets to those levels.
Here is the key resistance levels:- 0.345 - s200
- 0.350 - e55
- 0.370 zone - e55/e100cross, resistance trendline and some old fibs
- 0.405 - e21/e55 cross
- 0.425 - Nov Fib
- 0.460 - trendline
- 0.495 - 0.00% high.
Looking for the break and bounce, hopefully we can go through a couple at a time.
The best part though is we just about have the strongest bull continuation signal- the blue e100 is rejected from crossing the red e200 and the green w5 has now crossed back over. We want to see the green w5 do a bit of a bounce off the red and the cyan e55 turn upwards and I reckon we are well and truly off to the race's again.
(20min delay)
