Weekly ASX Update: Macmahon Holdings Limited (MAH.AX) |
by, James A. Hyerczyk
A late session surge in Macmahon Holdings Limited (MAH.AX) triggered a breakout over the resistance line of a falling wedge chart pattern on the 240-minute chart. The move signals the start of a possible rally into the Autochartist forecast zone at .59 to .60.
The overall quality of the chart pattern is a below average 4-bars. The initial trend which measures the strength of the trend prior to the chart pattern’s formation is a well-below average 2-bars. This signals a weak initial trend. The uniformity indicator is important because it measures the number of touches of the support and resistance lines. A low uniformity rating indicates few touches. It also looks for equidistant tops and bottoms. The current rating is a below average 4-bars. The clarity indicator is an above average 6-bars. This means the pattern was formed with minimal market noise, typically indicated by “spikes”.
The falling wedge chart pattern is a trending pattern. It carries the characteristics of a channel down and a triangle. Starting wide at the onset and gradually narrowing as the pattern progressed, the recent series of tight ranges was indicative of an impending breakout. The solid 9-bar breakout rating means there was momentum when the market crossed the resistance line. Should the upside volatility continue then traders should look for a test of the Autochartist target zone over the near-term.
About the author: Autochartist
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