In my last video, we talked about one of the most important principles that govern , the Principle of Polarity. It is a must-know technique for any trader that states once a resistance (support) is defeated, it’ll become a support (resistance) in the future, next time the price retests it.
The 4,393 is working as a relevant , because it was a previous resistance (and previous ATH at the same time). It is also interesting to notice that when the index crashed on July 19, we sought the at 4,255, which was the previous too. Even during stressful times, it is possible to find some sense using price action.
For now, the index is behaving as we expected, the 21 is going up nicely, and it is another interesting for us. As we discussed, there’s a possibility of a Flag pattern too, but I’m not counting too much on that.
Now, some people might say, and I won’t disagree, that we have a possible Head & Shoulders chart pattern in the 1h chart. The problem is that today’s movement is ruining the pattern, and we are above the 21 again.
However, I agree that if we lose the 4,393 in the , along with the 4,369 in the , we might see a sharper pullback, but not a reversal. Let’s use Fibonacci in the daily chart:
Technically speaking, we could seek even the 61.8% retracement, and the mid-term bias would still be . The index would require a true structure to reverse for real, and as long as we don't see one, the trend will remain . Meanwhile, I’ll update you with my weekly videos and analysis.
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Thank you very much!
All the best to you.
Just begun watching your weekly market analysis on YouTube, which is really helpful.
Thank you so much for making all this available. It's been a big help to me on so many occasions to avoid going too defensive with my portfolio simply because the market had come such a long way. Of course we have to keep watching what the price action is telling us but it's made a huge positive difference to my portfolio returns to read your work.
All the best to you, my friend!
I hope it helps. Have a good day!