We are still in a Bullish reaction leg as the series of higher highs and higher lows is still intact. There is a compression ‘wedge’ pattern forming and there will likely be a break out soon. A break to the downside of the wedge will not necessarily mean a reversal unless 12422 is broken.
The current target for this time frame is the fork Median Line
Looking at this Bullish Reaction leg in more detail, we can use this minor median line set (fork) and notice that we missed the Median Line. We found the quartile (the 50 line) twice and we also tested the upper median line parallel a number of times before breaking out higher with a zoom. This zoom (arrowed) may prove to be significant because it likely left a ‘pocket’ in its wake and these pockets have a high probability of being retested.
Breakout levels would be above 610 or below 517 today. The 50 daily SMA is currently 12741 which is below the 200 daily SMA of 12782. Yesterday we saw a gap of 62 points and an additional gain of 7 points contributing to a +0.55% day. We have an R2 at 12622 and an S2 of 12454 with the daily pivot at 12538.
There is an ACR line set drawn on this chart with the centre line through the tops of these three lower peaks. The action line was taken from the low of the day and the equivalent reaction line was hit after a break above the centre line. The fork can be drawn from the three pivots before the break of the centre line and notice how price action is still responding to the UMLH and LMLH.
We have no obvious POC targets, because we have just taken out yesterday’s level. Just remember the low volume area that remains below the