Downtrend Continuations

17 mar

Hi Everyone and welcome to another weekly analyses: 18/03/24 - 22/03/24

Following the creation of new historical highs @ 18416.3 on Fri March 8th, price began it's downtrend to signal a daily HL @ 17793.2 on Fri March 15th.



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Will this downtrend continue? That remains to be seen this week.

Historically, whenever the bears were strong (shown by a bearish weekly candle), the bulls always recovered the move the following week indicating uptrend continuation. But presently, we can see that at the weekly HH, there are 2 bearish candles indicating that the bulls were not able to recover the first week's bearish pullback. Instead, the bears took over again last week ending the week with a strong rejection at resistance level @ 18270.0. This kind of rejection characterized by a long upper wick indicates that the bulls were weak and the bears gained strength and so there is a high probability that price may want to continue bearish for another week.



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My Trading Plan
Now that I have established a bias for the week, my trading plan is as follows:

Since last week ended with a Daily HL, this means that all timeframes from the day down are at some type of low. As I always say, price cannot continue to sell from a low and so a pullback to create highs on the smaller timeframes is required. Each week price makes it's weekly high and low points.

So for a downtrend, I am looking for similar continuations to last week where price made it's weekly high point on Tuesday before ending with week on Friday with a new Daily HL.

For the start of this week, I expect to see a bullish correction to last Friday's sell. Possible TPs or area of interest:
1. 18045.0 based off the 1H fibs at the 78.6% retracement level + an area of previous resistance.
2. 18172.8 based off the 2H fibs at the 78.6% retracement level

Once the weekly high has been established, I will then look for sells on Wednesday to create the weekly low on Friday.
1. A possible area of interest for a new Daily HL is at 17650.6 based off the Daily HL fibs between the 61.8% - 78.6% fib retracement level.



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Happy trading everyone and see you all next week!