Daily Indices Update: JP225 |
by, James A. Hyerczyk
After trading inside of a triangle chart pattern on the 240-minute chart for 35 candlesticks, the JP225 index CFD broke out to the upside, signaling a completed pattern and triggering a possible rally into the forecast zone at 9982.33 to 10136.80.
The triangle chart pattern is categorized as a non-trending pattern. This is because the market sits inside of an uptrending support line and a downtrending resistance line, often giving the appearance of a sideways, rangebound trade. The real action tends to take place following a breakout of either boundary because the compression of the two lines leads to a build-up of volatility that is waiting to expand.
The overall quality of the chart pattern is a solid 6-bars. This is led by the 8-bar clarity rating which indicates clear movement without “trading noise” to skew the pattern. The 7-bar uniformity rating shows clearly defined swing tops and bottoms. Although 3-5 bars tend to indicate distribution, the 6-bar initial trend rating in this case most likely represents a strong trend. The breakout rating is only a below average 4-bars, but a move through the last swing top near 9924.00 is likely to lead to an acceleration to the upside which is likely to support the drive into the target zone.
About the author: Autochartist
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