Updating our last report, the index breached the focal resistance at 3035, where it represents the neckline for the bullish pattern shown above.
This breach was followed by consecutive weekly closings above this level, signaling the ongoing bullishness to activate the pattern.
We can also see that the previously recorded top –January 2010- and the negativity on momentum indicators are pressuring the index to the downside and currently placing the index below the mentioned neckline.
We still see some positive factors that support our bullish expectations:
- Continued trading within the ascending channel over medium term basis
- The SMA 50 is good support for the bullish wave
- The initial breach for the neckline signals further bullishness on the way
Therefore, we expect the index to continue the upside move within the bullish correction formation for the entire decline from 4515 to the trough at 1760.
Those bullish expectations require steady weekly closings above 2815-2760.
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