CBA has lost momentum at a resistance line over the past few days
If CBA falls away from this level, the resistance line will be confirmed as the upper boundary of a wedge pattern.
This wedge looks like it could be the final wave in an Elliot 5 wave advance that began in September at $69.22. A break below the wedge support line could lead to a significant downward correction.
It would not surprise to see CBA spend a bit more time inside this wedge. Perhaps bouncing off the wedge support once more before finally breaking below
However, given the potentially bearish positioning of this wedge for Elliot wave traders, a strategy of selling close to the wedge resistance with a stop loss on the other side might provide an attractive risk: reward opportunity if the bearish break does unfold.
If CBA breaks meaningfully above this resistance then, this analysis no longer applies and the bearish wedge scenario will be negated.
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