13,500 is an area of major resistance for TSX.
It broke this level at midday. Will it hold above this level today, and how will it react tomorrow at the open? These are important questions as one decides to commit more money to the market.
The chart at the right is a snippet of the daily candlestick chart for the TSX. The red line is the 40-day moving average, the blue line is the 20-day moving average and the yellow line is the 10-day moving average. I use these three averages on the 6-month and 1-year charts with daily candlesticks. Each candlestick represents a day of price action.
Update: Market Close
The TSX is in good shape at this stage as the market closed at 13,559 near the high of the day:
- The price is above all three short-term moving averages — 10-day, 20-day and 40-day.
- The 10-day moving average has not crossed below the 20-day average.
- The market closed on a nice white candlestick — opened low and closed on a high.
An important aspect of support and resistance is whenever resistance is penetrated — 13,500 in this case — it reverses its role and now becomes support. So, is 13,500 a new support level for the TSX? Yes, it is now support but the level has not been tested and the level has only been broken for one day.
Where will the market open tomorrow?