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In our last note we highlighted the candle stick reversals (coloured arrows) which suggested the end of the short term move up. It was also noted that there was a short term consolidation between levels 49420 and 49965 and that we were looking for either an upside or downside breakout to occur for the next trade setup.
The downside breakout has in fact occurred and the price has since retested the resistance of the breakout. Those traders who are prepared to trade against the longer term uptrend might consider 48260 and 48050 as possible support targets, whilst using a close above 49420 as the failure level. It should be noted that a contrarian trade (against the trend) does carry an elevated risk relative to trading with the underlying trend.
Traders who prefer trading with the trend (as we do) might prefer to instead wait for the anticipated weakness to playout before looking for long entry once again.
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