The Greek General Index is testing today important support levels that could determine if the trend remains up or not. We have noted in several occasions through our posts or twitter, that the rise from last June and the low of 470, could very soon be at an end as the resistance levels the index has reached are too strong.
The weekly chart above show how far the index has risen inside the yellow trend channel. It has now reached the downward sloping blue resistance line from 2009 and it is testing the yellow channel support. After having finished 5 waves up, we expect a few months of corrective sideways to downward movement towards 38%-61,8% retracement.
Taking a closer look at the daily chart of the Greek General Index we have to mark two points of interest.
The index should not move past the yellow wave iv. For a new high to be achieved, prices should firstly not move below the yellow channel. Secondly, chances will diminish dramatically if blue wave ((4)) moves below 970 spot price. If this blue wave count holds true, then new highs above 1050 would be expected.
There is also another wave count that should be taken into consideration as it has bullish implications that target 1100 and higher. This takes into account the parameter that the bigger degree wave 5 starts at 758 and not at 754 as labeled with blue numbers in the previous chart. If we ignore the blue count, then the upward movement from 972 to 1052 is just a part of wave (5) of 5. In simpler words, if the 972 holds, there are good chances that the rise will continue towards 1100-1150. For this to be done, we need high volume and a rising pattern of waves.
Concluding, the price area that is being tested today (970) will determine our strategy for the recent months. The break of this level could mean the end of the entire move from last June. Staying inside the bigger channel will give us most probably new highs towards 1100.
As always, thank you for taking the time to read my new post.