Now that we know the category 5 cyclone did not inflict as much damage as expected, the iShares MSCI Australia Index (EWA) has popped to the upside. Let’s notice that today’s strength has pierced the Nov-Feb resistance line at 25.40 to a new rally peak at 25.60 so far.
The ability of the price structure to remain above the resistance line into today’s close, coupled with the corresponding upside “breakout” in my daily RSI (momentum) gauge, supports the underlying technical pattern set-up for a thrust out of the Nov-Feb bullish coil into a powerful new upleg that projects to 27.00-plus.
At this juncture, only a decline that breaks below the Jan 28 pivot low at 24.50 will wreck the current bullish scenario.
