Daily Indices Update: JP255 |
by, James A. Hyerczyk
The JP255 index CFD completed a 3-Point Retracement Fibonacci pattern, signaling the start of a potential break into a series of retracement levels. In this case, the three point pattern is designed to find a high touch point on the chart which leads to a correction into a low support area.
Recently, this market completed a retracement of Point B to Point C which has been identified as Point D. After two lower-lows on the 30-minute chart, the current break has exceeded a normal .500 to .618 retracement, touching a low level at the .786 price level at 9907.69. This indicates the index may be weakening.
While a break to 9897.00 will only mean a test of Point C or a potential double-bottom formation, momentum at the time of the test will determine whether the market holds this level or exceeds it. The next major support level that may be tested following an acceleration through Point C is the 1.618 level at 9866.10. Based on the down swing from Point B to Point C or 84.18 points, a similar correction from Point D will take the market to 9858.00. Should downside momentum continue to build, then traders should watch for a potential decline to 9866.10 to 9858.00 over the near-term.
About the author: Autochartist
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