The chart of major Australian Investment Bank has in recent weeks made a sharp rally out of what looks like a typical basing or “accumulation” pattern.
Over the past 2 weeks price has hesitated around the 27.50 level and in so doing formed a wedge or triangle pattern. A break above the wedge resistance would be a classic chart continuation set up.
In this case, the wedge breakout would also coincide with a break above the 200 day moving average adding additional confirmation of a bullish set up.
This chart is in a similar situation to the AUD:USD and NZD:USD charts I have commented on in recent days. I guess this is not surprizing since all 3 instruments are likely to be highly influenced by investor “risk on: risk off” sentiment.
The 200 day moving average is show as the green line on the chart. As you can see this currently intersects with the wedge resistance
The initial profit objective at around 29.40 projects the height of the wedge pattern from the wedge resistance line (assuming a break to the upside in the next few days). Extended or additional profit objectives based on Fib cluster levels could be identified at around 30.65 and 33.15.
If there is a set up I’ll post a follow up note with ideas on stop loss management and extended profit objectives