Summary for Week Ending 12th November 2005
Events took a while to get going this week as the market traded within a tight range this week until Thursday gave us a wide range outside day followed by further gains on Friday.
Looking at the chart, we can see that the consolidation that occurred this week was well beyond the realm of the previous swing giving us am air-gap pattern which is generally a bullish signal. the outside day on Thursday was very wide and an inside day on Friday was not at all off the table so a slight up day was a fairly good performance considering the dimension of the move from the point of consolidation. Looking ahead I would no be surprised if the market traveled back within the range of Thursdays outside day and it may drift down as far as the new support line around 1225.
As far as expectations are concerned I still believe that the previous high will be taken out. If the market does stop here it should only be briefly as this is obvious resistance and so far the market is not creeping up towards this old high, its running at it so that would imply that there is plenty of energy in the system on the bullish side.
This week perhaps some more consolidation but little in the way of dramatic movements to the downside. Longer term, should we see the market making it to new highs, and perform a consolidation above these old highs then we could see prices around 1350 by late Feb 2006.
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