Even strong end of year rallies have pullbacks and Australia 200 is showing signs of being a bit toppy this afternoon.
As the chart above shows, today’s candle peaked at the 5503/5505, October resistance According to the 14 day slow stochastic in the box below the chart, Australia 200 is also well over bought as it hits this resistance.
The Bollinger Bands are providing a possible sell set up on the shorter term 4 hour chart. This has set up for one of John Bollinger’s “M” reversal patterns where there is a double top style pattern with the first peak above the upper band and the second one below it. This indicates declining momentum and often precedes a trend reversal.
A close below minor support around 5470 might confirm weakness and set up for a tag of the 20 day moving average (middle band) or, if that breaks, a tag of the lower band.
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