On Friday the critical support at 1292 withstood the Bear?s raid. Yesterday bulls brightened up and achieved a “solid” upside move.
If we don’t forget that last week, momentum and breadth indicators had reached extremely oversold readings, yesterday strong move to the upside should be considered a relief bounce that will palliate those extreme readings.
But we cannot rule out that the current bounce may be more than a one-day affair and could have the intention to check the solidity of the resistances.
Therefore if a critical support has not been breached and the market is hugely oversold then the “pendulum” could now lean towards the bull?s side and price could now attempt a move up to test the critical initial resistance in the area of 1340.
