Turning down again?
The recent strong rebound in the KBW Bank Index (BKX) has taken prices back up to retest the previous downtrend base channel.
It is important to note that the longer term trend is likely still DOWN given the sharp break of its support trend line back in August (see left chart).
Friday’s double close key reversal pattern (also a bearish engulfing pattern) could potentially signal a reversal may be taking place here just below the said base channel.
IF that is the case, then prices could easily fall back to retest the previous swing low of 66.70 in due course.
A push above Friday’s high of 71.84 would likely suggests that the rebound still have legs and could take prices up to retest its 200-day SMA at 73.79.
Only a strong push above 74.00 would signal that the recent break of the LT downtrend was a false break and more upside is likely next.
Price movements in the next few days would shed better light
on the next big move for the index. Lower for now. (Read Report)
Source : CIMB Research
Labels: Technical Analysis