Technical Analysis: S&P/ASX 200 (XJO) The XJO experienced a strong bounce over the past few weeks, rebounding to its upper Bollinger band and its 61.8%...

Technical Analysis: S&P/ASX 200 (XJO) The XJO experienced a strong bounce over the past few weeks, rebounding to its upper Bollinger band and its 61.8% Fibonacci retracement ratio, showing significant improvement in momentum. The stochastic indicator has reached overbought territory, suggesting that the index is likely to experience a short term pull back soon. The first potential downside target is 5300. Given the strong rebound, the October 2014 low is now key support, which in our view is going to hold. Due to the recently increased volatility we believe that near term action will be choppy. Although a lot of damage has been done on the chart throughout September and October 2014, so far the long term up trend remains intact and given the recent improvement in momentum, the index has a good chance of recovery. More technical analysis on the Morgans blog: (VIEW LINK)