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GMMA Breakout Behaviour by Daryl Guppy
Daryl discusses a current chart of the S&P ASX 200 (XJO) index with his Guppy Multiple Moving Average (GMMA) indicator overlayed on the chart.
Despite the retreat from 4420 this has developed into a strong trend break. Traders now look for a rebound from the lower edge of the long term GMMA and this is under test again. This is a classic GMMA breakout behavior. The sustainability of the trend is yet to be tested so traders continue to manage using short-term rally trading methods. This has the potential to become a major trend change and lead into a strong Christmas rally. However volatility remains high and this poses problems for risk and stop loss management.
Another move above 4300 is very bullish. The next resistance level is 4450. This is also the width of the consolidation band projection.
This is the first genuine bullish activity for months. The activity has all the conditions of a precursor to a significant trend change...
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