I wrote yesterday about the possibility of the CBA chart being positioned at a Fibonacci turning point that might signal the beginning of a pullback in stocks. There's now a possibility that this pullback might lead into Christmas rally. After last night’s events the pullback scenario looks like being right. The question now is where the buying levels might be to set up for a Santa rally.
The CBA chart might provide better clues about potential support levels depending on how any pullback plays out.. However, at this stage a couple of the more obvious candidates might be:
- Around $76.80 which would pick up the bottom of the trend channel; the 61.8% Fibonacci retracement level and the 50 day moving average (not shown on the chart).
- Around $78.80. This is the shallow correction alternative which picks up the 38.2% retracement and 20 day moving average.
CBA Chart Daily
Source: CMC Markets Pro Platform