Two High Wave Candlesat the end of last week warned that the selling may well be over. This gave the Bulls the impetus to push on hard yesterday and we are a touch firmer in early trade today. We are now bang in the middle of our key levels with 358.6 to the downside and 433 in the other direction. The Bulls do have the upper hand at the moment and if they can keep us above our Marabuzo line which coincides with an old gap support at 379.2, then all looks fine.
Indicators in play.
High Wave Candles are formed when the market sees an open and close relatively close together. A series of these tells us that the battle between the Bulls and Bears is in the balance and usually sees the market reverse. A Marabuzo line is the 50% point between the open and close on a large range day where these two points are at or close to the days extremes. This line acts as resistance as we try to bounce and as support in a pull-back situation.
The Bounce looks good to continue as long as we remain above 379.2. However, we would not get carried away until 433 were breached and would prefer to sell in front of this price with a tight stop.