Since October, the Australian All Ordinaries index has been steadily climbing along its bullish uptrend line, demonstrating resilience despite a few zigzags along the way. The index has now touched this rising trend line for the third time, signaling the possibility of further rallies to come - potentially up to the horizontal pink resistance line - before pulling back to the upward trending redline.
Alternatively, it is conceivable that the index could break through the pink resistance line altogether, propelling it up to the purple line at the top of the chart. Should this occur, it would mark a significant inflection point as it represents previous highs.
It is important to note, however, that the current rally may not be fully supported by the fundamentals of the Australian economy. Accordingly, the purple line may well represent the upper limit of this upward trend.
Nonetheless, we maintain a bullish outlook until the upwards trend line is broken, and will continue to closely monitor the index as it progresses.
Alternatively, it is conceivable that the index could break through the pink resistance line altogether, propelling it up to the purple line at the top of the chart. Should this occur, it would mark a significant inflection point as it represents previous highs.
It is important to note, however, that the current rally may not be fully supported by the fundamentals of the Australian economy. Accordingly, the purple line may well represent the upper limit of this upward trend.
Nonetheless, we maintain a bullish outlook until the upwards trend line is broken, and will continue to closely monitor the index as it progresses.
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The line broke!