We had XAO retrace to 61.8% Fib. retracement (5130), from it’s October high. It did bounce off it, showing some buying at that level. Whether or not this level holds over the coming days remains to be seen. At the bottom window OBV ( On Balance Volume) has also broken down today, suggesting further downward pressure may be on the cards in the short term.
We already looked at the seasonality chart of XAO at an earlier post which may worth revisiting.
Second P&F Chart is used for trying to forecast the extend of this downward move with further analysis. This first Daily chart below showing the short term bearish move, which so far stalled at the 61.8 Fib. retracement today.
My personal expectation which may or may not be correct is that, the Trading Range on hand since late August, is likely be an ACCUMULATION rather than a REDISTRIBUTION. But for now, until it resolves itself with a move to upside or downside I wouldn’t know, no one would.
Daily Candle Chart Below.
Now to the Daily 3 Box, P&F H/L, Box Size 20 Points to get some idea as to where this downward move may (not will) end. For this, I use the last high pole for a BEARISH TENTATIVE PRICE OBJECTIVE which is @ 4820. We must also remember that from this same chart we have three BULLISH TENTATIVE COUNTS which are still active as long as the low of the chart is respected (4940). Any count (price objective) cancels out, if and when we see a close above or below it must also be said.
With P&F charts we can/may have opposing counts as we do with this chart. The average of the BULLISH COUNTS from memory was around 5900 for XAO as stated before and still active. This latest BEARISH COUNT is @ 4820 . If this is to be realised and we see a new low @ 4920 or below, that will negate all the bullish counts. If on the other hand we see a new high @ 5440 or above,that would cancel out this latest BEARISH COUNT. It can get confusing but this is the nature of P&F Charting.
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