Today we will take a look at daily chart of Top40 index.
Firstly, what we can see is that Top40 broke down sloping trend line and for now correction is over for this market. Trend line was at the same time top line of falling wedge pattern and with braking of that top line on Thursday and back test on Friday, so far we can say that falling wedge patter is broken. Target for that pattern is around 26100, few points short from year to date high.
If we inspect indicators on top of the chart, there are very obvious triple positive divergences on RSI and Stochastic oscillators and positive divergences on MACD. Stochastic is currently around 70, but RSI and MACD still have room to go up.
So, for now, Top40 chart looks very bullish, but markets are jittery, so have you mouse ready to trade.
On the down side, there is obvious support around 22900-23100. It was tested four times so far in last few months and this level is clear border between bulls and bears. Bulls should not be worried if Top40 is above it.
Moving averages, which help us to determine long, medium and short-term trends:
- long-term (200sma) - UP
- intermediate (89sma) - DOWN
- short-term (10ema) - UP
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