We suspect the two month sideways pattern in the ASX200 (XJO) will soon provide a break trade.<\/p>\n
The upside break trade appears the more likely outcome given the medium term trend points north as well as the pattern exhibiting flat highs and slightly higher lows. Therefore a confirmed break above 6000 implies a move to 6225\/6250 (height of pattern plus the break point) over a period of 2-4 weeks.<\/p>\n
Clearly the 6000 level has been providing strong resistance. If 6000 continues to hold and the XJO trades back below 5880 we expect to see a dip back to 5800. A break under that level morphs the two month structure into a topping pattern. In that event the downside target is around 5500 (pattern height less break point).<\/p>\n
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![\"\"](\"http:\/\/www.fnarena.com\/ckfinder\/userfiles\/images\/ffxjo32.jpg\")
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\nAnother trading idea from<\/strong><\/p>\n Fifth Wave |<\/strong> fwtc.com.au<\/strong><\/a> <\/p>\n FW generates over 150 Trading Alerts on the ASX100 each year. We are a subscription service specialising in short term technical strategies based on 27 years experience<\/strong>.<\/strong><\/p>\n AFSL 319830 |<\/strong> Disclaimer<\/strong><\/a><\/p>\n Reprinted with permission of the publisher.<\/em> Content included in this article is not by association the view of FNArena (see our disclaimer<\/a>).<\/em><\/p>\n Technical limitations <\/strong><\/em><\/p>\n If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.<\/strong><\/em><\/p>\n