Daily Indices Update: SWISS 20 (SWI20) |
By, James A. Hyerczyk
When the Swiss 20 (SWI20) index CFD formed Point C at 5819.00 on the 240-minute chart, it completed a 3-Point Extension Fibonacci pattern. On this chart this is a topping formation that may lead to a retracement of the rally from Point B at 5305.00 to Point C at 5819.00.
The 3-Point Extension Fibonacci pattern contains parts of the basic ABCD Fibonacci Pattern. It is often described as a countertrend pattern since the forecast projects a move in the opposite direction of the main trend. It is also often confused with the 3-Point Retracement Fibonacci pattern. This pattern forms the same ABC market swings except Point C is lower than Point A so that the formation creates a lower-bottom and a lower-top. The 3-Point Extension Fibonacci pattern shows a strong trending market since Point C is higher than Point A.
With the formation of Point C and the subsequent minor sell-off, Autochartist is forecasting a correction into a series of retracement level ranging from 5622.67 to 4987.33. This pattern can be attractive to both trend and counter-trend traders. Long trend-traders may have decided to exit when Point C was confirmed and may choose to re-enter when the key retracement levels are tested. The most important zone is created by the 50 percent and the 61.8 percent levels at 5562.00 to 5501.33 respectively. Counter-trend traders may find it beneficial to short the market looking for the same break into this potential support area.
About the author: Autochartist
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