Daily Indices Update: Australian 200 (AUS200) |
By, James A. Hyerczyk
A late session sell-off thrust the Australian 200 (AUS200) through the support level of an almost perfectly drawn descending triangle chart pattern, setting up the index CFD for a potential break into the Autochartist forecast price zone at 4133.22 to 4085.22.
The quality of the chart pattern is an above average 6-bars. The initial trend which measures the strength of the market prior to the formation of the chart pattern is rated a slightly below average 4-bars. The uniformity indicator is the highest rated quality indicator. It looks for equidistant tops and bottoms as well as measuring the number of touches of support and resistance. Its 9-bar rating suggested that support was a key area to watch so the breakdown through it carries some weight.
The descending triangle chart pattern is a non-trending pattern. Its support line is usually relatively flat, but when combined with a down-sloping resistance line, creates an apex that almost pinpoints the next breakout. It also signals impending volatility. The low 1-bar breakout rating means that momentum was weak after penetrating support, however, the size of the candlestick indicates that traders are acting with clarity and conviction. As long as this sentiment continues, traders should look for the weakness to continue into the target zone.
About the author: Autochartist
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