The uptrend holds for a second week with the market closing on its highs. The market is overbought in the short term and has cleared long term resistance. The market has been testing long term support on the monthly and has held two sell downs. The weekly outlook shows upside opening up with an upside target at 5481. The downside shows resistance to 5313 and a break below this level may see a rapid sell off. This indicates there is high risk in the market next week. The trend and momentum should see prices continue to rise however the stop for next week is 5424 and the market will need to close +100 points to hold the weekly uptrend. It is likely that another peak in the market will be seen this week. Volume was higher last week although volume decreased as prices rose.
The short term daily stop for Monday is 5298 and a close below this level on Monday will see the market on a downtrend on a daily and weekly basis ? Monday has daily upside to 5335. The market has bounced strongly from oversold conditions and we favour consolidation. Any strength from here will put the daily RSI at extreme levels.
The market has broken out and there is limited support for the market under 5300. Volumes on the rally indicate there is a high risk of a pull back next week and the stop confirms the risk is to the downside. We saw limited volume at the lows a fortnight ago and we are now seeing limited volumes at this peak. The daily will indicate the peak and any move to a daily downtrend will present a selling opportunity. The trend holds on all three timeframes and the daily and weekly are both at risk.
Bulls held the sellers on Monday and held the market neutral before a rally on Friday. The bulls did well to hold on to the trend but face a 100 point hurdle next week to maintain the trend.