Daily Indices Update: Australia200 (AUS200) |
By, James A. Hyerczyk
After straddling the Autochartist Key Levels support level at 4134.00 for several 30-minute time periods, it looks as if the Australia200 (AUS200) index CFD has finally succumbed to selling pressure and is poised to break sharply. If downside momentum can continue then this index CFD will likely reach the Autochartist forecast price zone at 4111.19 to 4079.84 over the near-term.
When using the Autochartist Key Levels trading tool to gauge the sentiment of a market, traders should be aware that although the signal is based on a simple trading premise, it is suggested that other conventional forms of technical analysis be applied so that one can gain clarity and trade with more conviction. It helps if one knows the dominate trend of the market, for example. In addition, traders should be aware of the position of one or more overbought/oversold oscillators. Applying other price indicators also helps as they sometimes form clusters with the identified key level. Finally, key levels can also be combined with other Autochartist trading tools such as the Chart and Fibonacci patterns.
Prior to breaking through the support level, the AUS200 confirmed a double-top near 4175.00 when it broke through the last major swing bottom near 4135.00. This should’ve been a red flag for traders as it indicated that selling pressure was strong as the market was approaching the key level support line. Even before this pattern was confirmed, traders should’ve noticed the size of the red candlesticks as well as the consecutive bearish candlesticks. All of this indicates that short-sellers have built big positions and have set up the market for a possible acceleration into the target zone. With the pattern in place, all that bearish traders seem to be waiting for is increased volatility.
About the author: Autochartist
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