This now looks like a short term bottom.Who was selling today? The scardy cats, Johnnie-come-latelies. Who was buying today - hoovering up all those shares? Seems to me it was the strong hands who started this selling.
Also - a lot of stocks reached important support today; e.g., CBA today had a low of 52.80, the high on 25/1/2011 was 52.82. The high on 2/2/2011 was 52.85. And that's also a nice ABC retracement for CBA.
Given that today's candle was a shooting star (on high volume) and also a relatively narrow range bar - and you get the final piece of the puzzle.
Also - a lot of stocks reached important support today; e.g., CBA today had a low of 52.80, the high on 25/1/2011 was 52.82. The high on 2/2/2011 was 52.85. And that's also a nice ABC retracement for CBA.
Given that today's candle was a shooting star (on high volume) and also a relatively narrow range bar - and you get the final piece of the puzzle.
Considerable technical damage has been done to the index:
- MACD Histogram is below its zero line
- RSI is below its mid-line
- Directional Indicator Histogram is below its zero line.
That's the trifecta of technical indicators.
So. We have what looks like a short-term bottom.
A short-term uptrend now looks on the cards. But I won't be counting on it to sustain into new highs.
We shall see.
Good luck
Red
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