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Imminent AUS200 Index Bear Cross – Are Sellers Ready To Plummet Price Lower?
DISCLAIMER: I am not a financial advisor nor certified analyst and definitely not a pro trader. All contents discussed on this blogpost are solely my own views and for Trading education/entertainment purposes only. Indices and CFD Trading are extremely risky where losses can exceed deposits. Enter with discretion. Do your own research and due diligence. The basis of this trading analysis is purely technical in nature.
Are the bears ready for more selling onslaught? We will soon find out. By writing my first ever Finlogix analysis for this year 2022, I have decided to start scouting the Australian stock market. Price action suggested that after the AUS200 index managed to pull through a stellar upward rally that started from early December up to 4th of January 2022, price was immediately went in north direction.
We can easily count the daily Elliot waves from here. It is obvious that the 5th motive wave was the top of that rally. At least it the index started the new year with a bang! One of the key fundamental news is that Energy stocks carried the index price higher altogether on fears of global supply disruption after Indonesia imposed a ban on coal exports.
But then, corrective market cycle took over quickly. The 2-day sell-offs sent the price toward January 6 low then price tried to make a dead cat bounce the following day but eventually bulls cannot figure out and eventually led the index in printing back to back lows by January 10 Monday market close. All happened quickly in just a span of 6 days. For now that day would be our fresh monthly low record in the making but not too long. I presume that we are heading towards an ABCDE correction which supports my claim for a bear cross to occur very soon.
From the back of a sudden and pesky rising Covid cases in the start of the year (big thanks to the Omicron variant!), the Australian stock markets have started to free fall. I can see this as a selling opportunity. Only time will tell when the angrier and madder bears together with the grizzlies will continue their mission. XJO’s daily RSI indicator failed to hold above the neutral yet crucial 50 mark while its MACD continues to print for a bearish divergence.
I will definitely sell the rally attempts! My short trade entry will be on the re-testing on the 100 moving average. Technically, both the 50 and 100 MAs failed to sustain the price! In fact, at the time of writing this up, we had a big bad bearish daily candle close in 18th! Support was found momentarily and the buyers will try to push it up towards my entry.
I will put a stop loss at 7,500 and take profit mark at the September 2021 low as hard support. I speculate it as the end of wave E. A roughly 2.33 risk:reward ratio to take on. Good luck!