Weekly ASX Update: Iluka Resources Limited (ILU.AX) |
by, James A. Hyerczyk
After using 91 candlesticks to form a rising wedge chart pattern on the 240-minute chart, Iluka Resources (ILU.AX) finally broke through the support line, completing the chart pattern and setting up a possible break into the Autochartist forecast zone at 14.00 to 11.55.
The overall quality of the chart pattern is a solid 7-bars. The initial trend which is the strength of the trend prior to the chart pattern’s formation is an impressive 9-bars indicating a strong trend. The uniformity indicator looks for equidistant tops and bottoms as well as measuring the number of success touches of support and resistance. The strong 9-bar rating suggests the presence of at least one of these key factors. The low 4-bar clarity rating suggests the presence of “market noise” which may have been in the form of a gap or a market “spike”.
The gap down along with a lengthy bearish candlestick triggered the breakdown through the support line. Before this equity CFD even reaches the target zone, however, it has to take out the last swing bottom at 14.42. Once this occurs the market is likely to accelerate to the downside. Short-traders are encouraged to watch when the market reaches the first level of the target zone. This is because the size of the target range is an incredible 2.45. How the market behaves at the first forecast level will be determined by volatility or momentum.
About the author: Autochartist
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