Observations on Milanka
1. Milanka has recovered above a major support line (6800), which had been strong in November and December as well (the green line).
2. Milanka started forming the double-top days before the ASI.
3. Despite the current Northern movement, the main trend still remains bearish (note the long blue trend line).
4. There seems to be a resistance around 7350 area. It has been clearly broken only in late September where high momentum was seen (note the trend line near late September and RSI above 70).
5. Milanka is still below the 38.2% level. The next key level would be the 61.8% (note the perfect alignment between the 61.8% level (7100) and the valley between the double-top. In addition, 7100 has been S/R since mid October).
6. RSI on Milanka has clearly moved out of the "oversold" area. Note that, at its worse, the RSI on Milanka has been around 18!Analysis:
- The Milanka constituents were offered at good prices lately. This is the reason for the RSI to reach lows around 18. (RSI was low because of the stronger negative changes). But a Bullish trend is now evident from the last week's performance on Milanka (In addition, RSI currently hovers around 40-50).
- Milanka is sitting on a stable support (6800) and moving up. Its possible for it to consolidate around the 61.8% level. The current upward momentum could allow that (note the blue trend line starting from 22nd March). According to the crossing of the trend lines with the 61.8% level, and the upward pointing RSI, this could happen within this week itself (or early next week).
- In order to indicate real growth, Milanka needs to prove itself by clearly breaking above, on reaching the 61.8% level.
- IF Milanka can do so, then the only resistance level is at 7350. However, as seen in late September, this resistance can easily be broken if there is strong momentum. From last week's price action as well as current RSI value, such momentum is possible.Conclusion
According to Milanka's performance, the market has potential for a strong upward momentum within the next two weeks.
This is just my personal view of the market, so guys pls don't hold me against this, ok. :)
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