Markets still correcting .... False break outs

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Derek  31 Jul 2018

Morning,

International:
Markets world wide are still correcting.

The NASDAQ that lead the gain is now the index that is correcting the most.
My short term trend line for the NASDAQ was broken 2 days ago, now it is just above the long term trend and 50 day moving average lines. It does not look as if they will hold, we will have to wait and see.



Notice the sequence at Akamai Technologies. First the piercing candle in overbought territory with FrontRunner breaking down and the MACD making a red bar. Then the massive -5.46% drop to break the trend line. You decide what signals to follow? I followed the first 3.



Advanced Micro Devices is still making new highs, but with this strong correction it is making doji's. You will most like see some consolidation coming.



JSE Technical:
Against all these corrections, the banking sector is still building on their J-Curves. Standard Bank even broke a long term trend line!



One share that is really frustrating me is Pick n Pay Stores. It dropped below my support line, but when it was in oversold territory, FrontRunner broke up and the share closed again above support line. There was only 3 closes below this support line that makes it still valid! (false break down)



False Breakouts:
A share price needs to stay 4 days below or above a break line, otherwise it is considered as false. A very frustrating concept! If the breakout happens in oversold or overbought territory, it helps you not to follow these false breakouts.

Enjoy your day.
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