ALSI - All time high in sight
By Technical Analyst Colin Abrams
[Signals done on alsi future]
Recommendation: LOOK TO SELL SHORT (WITH CAUTION)
Current Trend: Short-term up but overbought. Med and long-term sideways.
Strategy: Sell short a breaking of its prior two-day low, or a reversal week down (more conservative).
(Daily)
Chart Setup: The All Share index gave a classic reversal candle down on Friday from line 4. On Tuesday we got another classic reversal candle down. However neither candle has had its low broken to trigger the short entry. [Remember it has to break the low of a reversal day down to trigger the entry; and vice versa for a reversal day up. A reversal day/candle on its own is not reliable enough]. We are seeing a preponderance of bearish candles though and this points to a sell-off to come.
- Its daily Stochastic (on top) is overbought and is giving a negative divergence, waring of the correction to come.
Strategy Details: Sell it short on an intraday break of its prior two-day low, given that we have bearish reversal candles. As mentioned last week, this is still a fairly aggressive signal because it’s against the trend. A reversal week down will be the more conservative entry. (Another option is a close below the previous day’s low).
Target: To line 6 support at 53 250. Take half profits there. Further potential to line 7 at the 52 800 level for taking remaining profits. To the upside resistance is still line 4 (54 680/54 700), then its all time high at line 5 (55 355).
Stop-loss: A close above the high of the current rally. From 53 500 lower the stop to a breaking of its prior two-day high. Then prior one-day high from 52 800.
Wishing you profitable trading until next time.
Colin Abrams
