what's next? TA ( pls save your breath if not int.)13 Jun 2021 13:14
the chart was pretty good since the 10th of may in foretelling what came next. To recap.
10/05 closed at ATH of 275p. small retrace and had another go on 14/05 but only went to 273p. There was an argument to be made it would fall from that second failed attempt but it was just as easy to argue it could have a third go. The clearer danger signal was the fall below 266p which happened with a close at 258p on the 19th. it tried to get back above 266p but failed closing at 264p. The absolute confirmation is when it fell again below 258p on the 24th. These support levels were identified in good time and gave a heads up to what was most likely unfolding (I recall saying 235p was key at the time and said 214p was the next likely support should 235p go)
In the almost test book zig-zag down, there was the break out when the SP rallied and closed above 241p which had proved to be a level of note within a smaller TR within the larger TR. It was unfortunately short lived and I was one of some that were caught in that bull trap.
Finally 214p was breached intraday but held firm and now there has been a sharp upward move taking out previous resistance levels, namely 236p, & 242p. (Buyers piled in at the base of the support of 214p, hence the exaggerated quick move)There have also been a couple of previous spikes around 252-257p within the time frame I am discussing, so again the close on Friday at 259p bodes well for further gains having taken them out.
That was then. (and I am just looking at the chart not the news flow) What's likely next?
Its a bit muddy right now in fact. Normally after such a sharp move up further gains would be expected as that momentum carries over, and that may well be the case, but there was a similar situation last week when the SP went from 235-252 only to fall the next day down to 223p, so that will make some wary and maybe not wanting to commit until its a bit clearer.
My thoughts are it will close around 265p tomorrow, or at least flirt with it, to try and see what the sentiment is, to see how many sellers (if any) it flushes out. As I say normally, there is enough residual momentum after a singles day's big move for it to go on a bit and overall that's why I think it will rise, but its a close call. If it does fall the 250-252p looks like a level for a breather if it wants one
If you had been super relaxed, you would just patiently have been waiting for either 214p or 275p to be breached before deciding your next course of action. It gets a bit more frenetic buying/selling within the range as the risk increases of making the wrong decision.
So, for now the recent downtrend has been reversed and there are grounds for thinking its more likely to rise further, rather than fall back, but in another , wider view, its just still stuck in this broad TR and there is "nothing to see here" at 259p.
Look out for a close above 266p and a close above 275p in particular. That when the fireworks should really happen