High probability TSX Index will test support of 12,900
Technical analysis is all about evaluating probabilities. There are no sure things when you evaluate a chart: just guideposts. In the near-term, the above chart indicates a high probability that the TSX Index will test support of 12,900. And there is a low probability that the index will break resistance of 13,500.
Here are the negative points from the above chart:
- Tall shaven head and bottom candlestick on the chart today
- The 10-Day SMA crossed below the 20-Day SMA
- The volume was average today but volume does not have to confirm a downtrend
- RSI is confirming the downtrend
- Notice the divergence when RSI did not confirm the November high
Reference the breakout for the TSX above resistance on October 18, 2013. This is now the support zone on the above chart. The reversal of roles is an important concept in technical analysis.
Note: Click on HOME for updated postings. This technical analysis is for educational purposes so you can learn to trade online using candlestick charts and other technical indicators including volume, moving averages and oscillators. Please conduct your own chart analysis or consult your financial advisor before making investment decisions. The author of this article may hold long or short positions in the featured stock or index.
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