Evening all,
Short post on the Australian bourse for today. The ASX came off highs at the 5200 region along with global markets. The picture on the chart is a classic double top topping pattern with slightly higher highs for the right-hand side peak. A breakout below the neckline signalled confirmation of the pattern, and the downside target was hit with ease. Now, the ASX is flirting with the 200-day MA, and a possible reversal kind of pattern may be in the making. The ASX made two dives down to make recent lows; the second one crept below the first by a small margin (see two blue arrows). Indicators are doing the opposite of price action by making higher lows in the same time period. This is a simple illustration of a bullish convergence. I strongly believe in divergence and convergence signals from indicators. So, let us see how this pans out.
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