XJO about to retest the 50$% retracement level at 5000.
XJO rallies after 38.2% retracement
Not this week.
The XJO 5000 level is proving to be a stubborn obstacle to further gains of the Australian share-market at a time when the USA indices have forged new highs after the GFC.
After reaching 5250 in a previous thrust above 5000, the XJO developed the jitters at such a “heady” height, and went into a decline starting in the bogey month of May.
After a 38.2% retracement, the index found support at 4650, forming a double bottom, and has rallied steadily since.
Today buyers pushed the index higher to just reach the key 5000 resistance level before sellers took profits and lowered the index to a close at 4980.
The candlestick appearance for today’s trading can be perhaps called a “near” gravestone Doji, since the real body is not as small as usual. This appearance indicates trader indecision, and raises the spectre of a short-term trend reversal next week
The RSI however is at 60, and still short of overbought territory.
My expectation is for 5000 resistance to be tested again next week.
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Thanks Ken. Gravestonre Doji’s……. this is definitely a whole new world for me but fascinating.
Hope you are feeling much better.
Regards
Erik Metanomski
Thanks so much for looking at my blog Erik. I’m gradually on the mend, and trying my hand at a few posts again. I hope they make some sense.