we band of brothers - wednesday, page-37

Above is a Candle Stick Chart for the XJO.

In Australia today:

50 Leaders +0.1%
XJO =0.1%
Materials +0.2%
Financials x-Property +0.1%
Small Ordinaries -0.1%
Gold Miners -0.1%
Mid-Cap 50 +0.0%

Today was another reversal day – down then up – and finished marginally positive. Volume was very light. Breadth was marginally weaker. Judging by the volume today, sellers were standing aside. This looks like a bit of short covering coming into the market. It’s not enough yet to shove this market higher, but there are some tentative positive signs. We still need to see a strong up day to say this is over.

Technical Comment on the XJO (closed at 5153):

Indicators

RSI9: 35.7. Oversold.
MACD Histogram. Below zero. Negative.
MACD: Marginally above zero. Neutral.
Stochastic: 12.8. Oversold.
CCI.14: -184. Oversold.

The chart bounced off on old oblique trend line today, and, once again, finished at horizontal resistance. The market is oversold, so some sort of a bounce is likely. Longer term I’m still bearish on this market based on the Weekly chart which could descend a lot more yet before a meaningful bottom is found. So, we’re in potential bounce territory – any bounce has to get above 20-Day, 40-Day and horizontal resistance. That might be a big ask. That’s the technical damage that’s been done. We can expect a test of those levels, but judging by the Weekly chart, there’s a high likelihood of failure.

Once again, here’s the BHP chart:

The action today was positive, running the stops on the horizontal support level at 34.70. The stock finished up modestly +0.37%. This is suggesting some more upside. The measured move from the symmetrical triangle suggests a move, longer term, down to around 32.70. There’ll be plenty of traders looking at this and buying – believing this is in a trading range and likely to go back up much higher. Maybe they’re right. That’s a reasonable position to be taking. But – if this breaks below horizontal support at 34.70, look out below.

Redbacka