Yesterday’s rebound was a relief but traders should continue to stay cautious as prices are still trapped in a declining channel. The head and shoulder formation will haunt the market and we suspect any rebound could be shortlived, unless the candles swing past its 50-day SMAs at 1,527. For now, the 1,474 support level is a level of significance, as it is also the neckline support of this H&S formation. Breaking below this level is bearish and would likely drag prices towards its 200-day SMA at 1,444. On the upside, we think any rebound would likely cap at 1,511-1,527, its 30-day and 50-day SMAs respectively.
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