Some profit taking .... Strong resistance lines

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Derek  8 Nov 2017

Morning,

When markets have moved as strong as it did lately, you will get some profit taking.

International:
We also see some profit taking in the East and US with mixed movements.

After the FTSE made another attempt to break its resistance, it failed again. This resistance line has been touched 17 times. Notice that the MACD never broke up. It will take a lot of steam to break this resistance.



After Yum! Brands broke its trend line, it just keep on moving stronger.



JSE Technical:
Another pattern one often sees is that a trend line gets broken and then the price falls back again to touch the break line and then take off. You can see this on the graph of Shoprite. Notice that FrontRunner broke up, but not MACD yet.



Dis-Chem Pharmacies made a double top against resistance to close on the EMA8 line. Notice that both FrontRunner and MACD broke down, it is only the EMA8 that is still holding? Something to watch!



Strong Resistance Lines:
The more times a resistance or support line gets touched, the stronger it becomes. When it is touched only 2 times, that is the weakest line. The resistance line of the FTSE that is touched 17 times .... this is a very very strong line and only a lot of bullish steam can break it.

Enjoy your day.
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