Australia’s ASX 200 retreated below the band of resistance at 4350/4400. Recovery above 4400 would confirm the primary up-trend signaled by the 63-day Twiggs Momentum cross to above zero. Target for an advance would be the 2011 high at 4900*.
* Target calculation: 4400 + (4400 – 3900) = 4900
On the daily chart, however, bearish divergence on 21-day Twiggs Money Flow highlights medium-term selling pressure, warning of a correction. Breach of the rising trendline and support at 4250 would confirm, signaling another test of primary support at 4000.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.
Are you saying – Sell below 4250 and buy above 4400?
What Close would you need to see in either case?
Exactly when to buy or sell will depend on your investment/trading time frame but respect of support at 4250 would signal that the up-trend is intact while failure would indicate the opposite. A Close would give a stronger signal than an intra-day breakout.