Weekly ASX Update: Bradken Limited (BKN.AX) |
by, James A. Hyerczyk
Bradken Limited (BRN.AX) showed some strength late last week when it broke out over the downtrending resistance line of a flag chart pattern on the 1440-minute chart. The move is impressive because the size of the candlestick indicates there may have been some buying power behind the breakout.
The overall quality rating for this chart pattern is a powerful 8-bars. The initial trend rating is the maximum 10-bars. This means that the rally leading up to the chart formation was very strong. Since the breakout was in the direction of the initial trend, Autochartist has identified this as a continuation chart pattern. The 7-bar uniformity rating indicates an above average presence of equidistant tops and bottoms. The quality indicator looks for the existence of “gaps” and “price spikes”. Its 7-bar rating means this solid chart pattern was created without much “market noise”.
The flag chart pattern is a trending pattern. The almost parallel support and resistance lines held this equity CFD in a downtrend for 25 candlesticks. The 6-bar breakout rating is slightly above average. This means additional volatility is going to be needed to drive this market into the Autochartist forecast price zone 7.99 to 8.47. Long traders should watch for potential resistance traps at the November 9 top at 7.98 and the October 28 top at 8.17. Since this is a momentum driven breakout, it is suggested that long traders use tight stop loss orders.
About the author: Autochartist
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