Good morning team,
The ASX has hit record highs and many indicators and technical structures are suggesting an overbought condition, followed by a possible pullback opportunity.
ASX Weekly Charts
The ASX has created another overthrow from the rising channel formation. There is an overbought reading on the RSI followed by an extremely sharp rising wedge structure. I am not sure if the full breakdown from the wedge will occur just yet, however, based on the Elliott wave structure below there is a possibility of a smaller pullback in the market.
ASX – 1 Hour Charts
The sideways consolidation on the 1-hour charts is possibly an ABC correction, therefore the final C leg is yet to complete. If the market moves above the 7375 resistance then bulls will be back in control, therefore this can act as our SL level.
Trade Setup: SELL Market execution, current price on FOCUS MARKETS 7300, stop loss 7377 and take profit 7140.
Stop loss: 77 pips
Take profit: 160 pips
1 contract on Focus markets = $10 per pip
1 contract on Fusion markets = $1 per pip
Price may vary between brokers:
Trade Setup on Fusion market:
SELL – Current price 7280, stop loss 7365 and take profit 7130