Judging the weight of evidence is the aim of this real time exercise by incorporating monthly as well as 2 daily charts. One may also do the weekly analysis for further insights.
Least understood phase or phases in TA may be the congestion/congestions. Here is a long term( monthly) one with MFG.ASX. It is important to identify the boundaries of it and apply appropriate analysis to uncover the motives of the smart money/better informed. Yes, through tape/chart reading.
One of the stellar performers has been MFG.ASX in our market without a doubt.Lets try and drill it down in the monthly time frame first.Congested/rangebound/sideways price action behaviour in the Intermediate term (since 2016) within a major uptrend still. The resolution of the congestion ( box of tricks), up or down, is likely to determine the direction of it’s next major move and tell us whether the pattern is a distribution or re-accumulation.
What do we know so far ? Four resistance tests that have failed to overcome that $28-$29.50 zone of resistance. A fact.
Where is the price may be headed in the short term ? $22.50 is the internal support/first support to watch for now, followed by $20 ( box support).Why do I think that we may be testing the support or support levels ? A single bar reversal ( call it whatever you wish) which is likely to close on it’s low is the technical evidence.
As long as the pattern remains unresolved ( box of tricks as I call it) the major trend remains up. This is also a fact.
Here is the monthly chart courtesy of tradingview.com with some additional info. on the chart.
On the daily below can we see the LOWER PEAKS and LOWER TROUGHS ? Or the change indicated by Red and Blue wave lines ? What is the dominant wave ( down/Red or up/Blue) ?
Here is the daily.But wait there is more ! PnF ( last chart) for the downside target forecast.With PnF chart, I am only focusing on the Box of Tricks of the daily bar chart.
Couple of forecasts as shown, horizontal and vertical. I have not shown the calculations as it would have made the chart unreadable due to lots of writing.They can easily be calculated from the info on the chart.
What does the bearish forecasts tell us ? Do they indicate that the support of the monthly box is likely to be tested and perhaps further downside ?
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