We have seen mixed and volatile trading for the last 63 days. This has produced an Expanding Wedge formation on the daily chart. Inside this formation is another Expanding Wedge pattern. These formations have an eventual bias to break to the upside:
• On a move through 4,362 the measured move target is 4,521.
• On a move through 4,452 the measured move target is 4,610.
Trendline support is located at 4,145.
The four-hour chart highlights the index moving lower within a bearish channel formation. We have a 261.8% extension level located at 4,170. Elliott Wave enthusiasts may look to this as the completion of a bearish 5-wave count. The channel base is currently located at 4,145.
Conclusion: although there is ample scope for further losses, we would look to 4,170-4,145 as a substantial support zone. Buying dips, and focusing on the measured move targets offers a solid risk-reward setup.
Resistance: 4,277 (channel top), 4,521 (measured move), 4,610 (measured move)
Support: 4,170 (261.8%), 4,145 (wedge base, channel base), 4,112 (medium- term support)
• On a move through 4,362 the measured move target is 4,521.
• On a move through 4,452 the measured move target is 4,610.
Trendline support is located at 4,145.
The four-hour chart highlights the index moving lower within a bearish channel formation. We have a 261.8% extension level located at 4,170. Elliott Wave enthusiasts may look to this as the completion of a bearish 5-wave count. The channel base is currently located at 4,145.
Conclusion: although there is ample scope for further losses, we would look to 4,170-4,145 as a substantial support zone. Buying dips, and focusing on the measured move targets offers a solid risk-reward setup.
Resistance: 4,277 (channel top), 4,521 (measured move), 4,610 (measured move)
Support: 4,170 (261.8%), 4,145 (wedge base, channel base), 4,112 (medium- term support)