Knocking On The Door Of 4,800

Today the XJO came within touching distance of 4,800, but ended up closing well back of the mark. The result was a doji candlestick print on the daily chart, which may well be a sign that the bulls are running out of steam. We have now seen two divergences from the medium term resistance line within the past week.

 

We may see the XJO come back and retest the support of the short-term up channel later this week, before making another run at 4,800. If the support doesn’t hold, the XJO may be supported at the 78.6% retracement of April 2011 highs at 4,732, as well as the 20DMA.

A push beyond 4,800 will put our target of 4,950 well within sight, with a possible test of the 4,969 April 2011 high on the cards.