To Breakout or Retrace
To break out, or to retrace lower from resistance – that is the question facing the market right now.
Let’s take a quick look at 2,000 and plot the “price pathways” above and beneath this level with targets and trading ideas.
Here’s our Daily Chart for the “Battle for 2,000″ taking place this week:
We’re focusing all our attention on the 2,000 Index level which is a “Round Number” Resistance target along with the 61.8% Fibonacci Retracement as drawn.
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Price strongly rallied up toward this level in a similar pattern to October 2015.
Here are our focal levels and trading targets for the week ahead:
The underside of the 200 day SMA at 2,025 is an “upside target” if price remains above 2,000
2,080 is the upside target if – in the future – price breaks firmly above 2,025
and 1,960 then 1,945 are the downside targets in the event sellers win here and push the market lower.
No matter what other indicators or tactics you are using this week, focus on 2,000 and who wins the battle.