Yesterday’s price action, second consecutive long black candle, which firstly confirmed the previous BEARISH ENGULFING PATTERN (Feb 10th) and secondly broke, on a closing basis the base of a triangle pattern .
Global picture is not encouraging for the upcoming week and this triangle pattern gives a technical target @ 12’862 which is roughly the same level of the first strategic target I was calling for @ 12’894 in my previous analysis.
The weekly clouds support area (in overlay on this daily chart ) will be the next zone to look at very carefully as a failure to stay above the weekly clouds first and above the former low @ 13’706 would clearly open the way for the target previously mentioned (12’894-12’862).
RSI is converging to the downside too and the lagging line is also pointing to further downside.
After the recent decline, seen the last 2 days, we may see a pullback which is expected to be only a corrective move in a established broad bear trend calling for lower levels.
ONLY A CLEAR AND SUSTAINABLE RECOVERY ABOVE 15’000 (which means, above the cluster of TS , MBB and KS and last but not least above the top of the triangle resistance line) WOULD FORCE TO A VIEW REASSESSMENT OF THIS ONGOING DOWNSIDE RISK AND WOULD TEMPORARY NEUTRALISE THIS PERSISTING DOWNWARD PRESSURE.
Indeed,if such kind of rally should occur, as you can see on this daily chart the next barrier resistance will be the daily clouds zone currently around the 16’000.
Interesting to note the current thickness of the clouds (which means a clear fragility and which, in case of a strong and powerful reversal could be broken easily.
in addition watch also the shape of the daily clouds projection which are pointing to the downside and which in a couple of days will be around the 15’250-15’000 area, which also coincides with the former high ( doji ) reached on Feb 2nd and with the zone to be broken to stabilize the situation.
4 HOURS (H4)
Also below the clouds as the Lagging line too.
RSI is converging to the downside
No sign of bullish divergence yet in this H4 time frame.
WATCH PRICE ACTION ON SHORTER INTRADAY TIME FRAMES IN ORDER TO DETECT EARLY TACTICAL REVERSAL SIGNAL WHICH MAY GIVE YOU SHORT TERM COUNTERTREND TRADING OPPORTUNITIES WHICH ONCE AGAIN SHOULD BE MONITORED IN APPLYING A DISCIPLINED RISK REWARD RATIO IN PLACING STOP LOSS ACCORDINGLY.
WEEKLY PICTURE : WARNING !
Looking briefly, at the weekly chart, you can see that this last weekly price action triggered a BEARISH ENGULFING PATTERN after having failed to recover above both the Tenkan-Sen (15’182) and the Kijun-Sen (15’236).
Weekly clouds support between 14’127 and 12’914
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Ironman8848 & Jean-Pierre Burki
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