The five year weekly chart of CBA shows that $70 has become an important resistance to support level.

In the three years to March 2015 its share-price doubled from $48 to a high of $96 exciting speculation that it might penetrate the elusive (for many companies) $100 barrier.

Since then, whilst the highs have formed a downward trend-line, the lows have respected faithfully, support at $70

Inevitably the price action must break-out from the narrowing angle of the triangle created. With the support line holding firm, one might speculate that the break-out is more likely to be to the upside.

If this eventuates, and support forms at $75, the next step might well be for an uptrend to emerge. A sustained penetration of the trend-line could be regarded as a Buy signal.

As always readers should not base their investments on technical analysis alone. Prospective changes should first be discussed with a qualified investment advisor, bearing in mind personal financial goals, and risk profile.

The writer holds shares in the Commonwealth Bank.

Categories: Chart Analyses, Chart Review

Tags: Commonwealth Bank of Australia, Support and resistance