The weekly chart shows how the bullishness that started on March 2009 until now has been ideally organized within a major ascending channel as seen on the chart below.
The nature of trading within this aforesaid ascending channel indicates that the major direction is definitely to the upside, targeting the resistance line around 6510.00. An inline with long term targets, there are always positive technical factors supporting the suggested bullishness.
The first technical factor is the minor ascending channel, which organizes the short term bullishness, targeting the same resistance areas, which is our awaited technical objective.
We can also see that the SMA 50 is carrying the upside wave from below, adding further strength to the upside move. Meanwhile, momentum indicators are moving inside neutral zones around the level of 50.00 but Stochastic is overlapping positively, suggesting that the bullishness will be in favor over short and medium term basis.
With a deeper look over daily basis, we can notice the successful breakout above the resistance of the minor descending channel, which coincided with SMA 50. Nevertheless, the index is facing the pivotal horizontal resistance at 5780; where this level represents the gateway for confirming the bullish wave as it represents the neckline for a bullish pattern. The index now needs to retest the previous broken resistance line of our caught minor bearish channel, which turned into support at 5665 from where it will reverse to the upside targeting 6100 as detailed on the chart below:
To conclude, the index is likely to continue the general upside wave targeting 6510; we do not rule out the possibility of some kind of fluctuation and embedded downside waves within the upside channel as the index moves towards the target.
On the other hand, we should observe the sensitive support areas around 5565 where a break of which will send the index directly towards the support level of the main ascending channel around 5220. Where breaching 5220 with weekly closings will be able to negate the bullish outlook, activating the bearishness, expected by the second team of technical analysts at ecPulse.com.
They believe that the bullish wave from the bottom of 3441.00 to the current levels should be seen as a correction for the entire decline from 6802.00; where the index is now approaching 76.4% Fibonacci level at the psychological level around 6000. They suggest that the trading is trapped within a rising wedge pattern that is seen as a continuation pattern, where a break of its support line will activate the bearishness over medium term basis as provided on the chart below:
The support line for this pattern resides around 5220.00, which are the most sensitive areas for preserving our previous projected bullishness. This different overview offers a general bearish possibility for 2011, targeting mainly 4755 followed by 4565 zones.
