- An inverse Head & Shoulders formation or Nose & Hands is forming. A close above 10,900 would confirm the formation. The minimium profit objective is 11,000.
- A flat formation was completed at the start of trading last night. An X-wave formed overnight. I expect to see the second corrective wave of a double or triple three form today. The second corrective wave could take the form of a zigzag.
- The mid-point of the pivot point and support one held as did resistance one.
- Price is below the 200-hour simple moving average.
- Volume has confirmed what has formed of the inverse H&S pattern. The volume on the head is lower than the volume on the left shoulder.
- Volume should be higher on the right shoulder than on the head to confirm a move higher.
- The RSI formed a divergence with price. A divergence is a non-confirmation of the low that formed on the 23rd.
- The RSI is trending up which signals that the downtrend has lost momentum.
- The overnight low in the market held bullish support on the RSI. The RSI holding support signals that the market has suffcient strength to make a new high.