At the beginning of December 2015 it reached the bottom of the channel and has reached the top of the channel at the beginning of May. Since then it has entered the cloud ranging inside it. It is now testing the bottom of the cloud.
The bottom of the cloud coincides with the 61.8% retrace of the previous up move and structure to the left. A break of this would indicate a move to the base of the previous up move which coincides with the Pichfork channel bottom and the 88.6% replacement.
The 21 period TDI is at 50% with current sentiment down, but 8sma up and the 55sma flat. This indicates the current down move still to be a retracement.
In the up move from the bottom of the long term channel the increases on the up moves and decreases on the down moves. This show support for the up move. The current down move is also on low volumes.
- I will be looking for a signal at the bottom of the cloud and if that does not hold the bottom of the pichfork channel to go long.
- If the target zone does not hold then I would expect a trend to the bottom of the long term channel
- A move up would test the top of the long term channel again. A break of this later in the month should mean the start of a significant up trend.