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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Featured Trade ASX 200 looking precarious

Article By: ,  Financial Analyst
March 21, 2019 12:39 AM

Short-term technical outlook on ASX 200/ Australia 200 Index (Thurs 21 Mar)

Key technical elements

  • Since its 06 Mar 2019 high of 6288, the Australia 200 Index (proxy for the ASX 200 futures) has continued to slide. Recent price action has staged a bearish breakdown from a minor range configuration support from 13 Mar 2019 low now acting as a key short-term resistance at 6185 (see 1-hour chart).
  • Current price action of the Index has started to form a bearish reversal “Head & Shoulders” configuration after failure to clear above the 6290 key long-term pivotal resistance as per highlighted earlier in our latest weekly technical outlook report published on Mon (click here for a recap).
  • The neckline support of the “Head & Shoulders” rests at 6126.
  • The daily RSI oscillator has dipped below its 50 level after a prior bearish divergence signal seen at its overbought region which indicates that medium-term upside momentum of the on-going rebound in price action from 23 Dec 2018 low has started to wane.
  • The next significant near-term support rests at 6080/6060 which is defined by the lower boundary of a minor descending channel from 06 Mar 2019 high, minor swing low areas of 20/21 Feb 2019 & 1.00 Fibonacci expansion of the on-going slide from 06 Mar 2019 high to 13 Mar 2019 minor swing low projected from 19 Mar 2019 U.S session high).

Key Levels (1 to 3 days)

Intermediate resistance: 6155

Pivot (key resistance): 6185

Supports: 6126 & 6080/60

Next resistance: 6230

Conclusion

The hourly Stochastic oscillator has almost reached an extreme oversold level. Thus, the Index may shape a minor bounce first towards the 6155 intermediate resistance. If the 6185 key short-term pivotal resistance is not surpassed and a break below 6126 is likely to reinforce a potential downleg to target the next support at 6080/60 in the first step.

On the flipside, a break above 6185 negates the bearish tone for a corrective rebound to retest the minor range resistance at 6230.



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