“We still maintain that there is a good reason to test the short side even though some of this confidence was erazed by yesterday decent recovery. Even so, after such a strong and prolonged rally, any pullback could take time to develop”.
The plan appears to be coming together and we have a new Bear Channel developing. Resistance from this Channel comes in today at 124.76 and support from the same comes in at 121.53. It will be interesting to see if the Bulls react should we get down to our shorter time Fibonacci Retracement level at 120.28.
Indicators in Play
A Bearish Engulfing pattern occurs at the top of trends and consists of two candles. The first is a green candle that opens low and closes higher. The second candle opens above the previous days close and closes below the previous day open.
Trend Channels appear when there is symmetry between a support or resistance line and its counterpart. These are useful in a market where there is a clear direction but the move is developing over time with counter swings occurring.
Summary
In a Bear Channel its the resistance line that is the real key and is the point that we will be looking to sell strength to. This comes in at 124.76 for todays action. Its looking like our Bearish Engulfing pattern on the 12th of May is finally taking effect.
David has been
analyzing and trading the worlds financial markets for the past 25 years. After an initial grounding with Mercury Asset Management and Warburg Securities he went on to set up his own brokerage operation in London. Since then he has appeared regularly on Bloomberg Television and been involved in providing analytics on behalf of some of the worlds major exchanges. He is also a member of the Society of Technical Analysts.
Free Trading Education - Education for Trading Stocks, Futures, Forex,
Commodities and ETFs
ADVERTISING
Free Trading Education - Education for Trading Stocks, Futures, Forex,
Commodities and ETFs
