snippets from my weekly stock market report, page-6

Zanzibar

Could you please explain why the XAO has to close below 3425 (& 3000) for the rally to continue ?


What is the technical point ?

Thanks

Sara

"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."