Global Equity Markets continue to remain in a range. The iShares MSCI All Country World Index ETF (ACWI.O) is possibly forming a 6 month-long symmetrical triangle with the upper boundary acting as resistance at 74 and the lower boundary as support at 70.5 levels. Breakout from this lengthy consolidation range will result in a directional move.
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A well-defined consolidation range can offer trading opportunity between the boundaries. Since the beginning of the year Global Equity Markets performance has been muted. The iShares MSCI All Country World Index ETF (ACWI.O) formed a possible symmetrical triangle with the upper boundary acting as resistance at 74 levels and the lower boundary as support at 70.5 levels. This week the ACWI ETF reversed from the strong resistance at 74 levels. Price chart suggests further consolidation in a range. A decisive breakout above 74 or below 70.5 levels will possibly complete the multi-month long consolidation and result in a directional move.
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Global equity markets performance as measured by the iShares MSCI All Country World Index, remains muted in a range. Choppy sideways consolidation has been intact for the past 5 months. The upper boundary of the consolidation is acting as resistance at 74 levels and the lower boundary as support at 70.5. The 5 month-long consolidation is possibly forming a symmetrical triangle. Long-term uptrend is still intact with the ACWI ETF trading above its 200 day (40-week) average.
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The iShares MSCI All Country World Index ETF (ACWI.O) found resistance at the upper boundary of its 5 month-long consolidation. Last 5 month's price action can be identified as a possible symmetrical triangle with the upper boundary acting as resistance at 74 levels and the lower boundary as support at 70.4 levels. I track ACWI ETF to measure Global equity markets performance. Price continues to remain range-bound.
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The benchmark for Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O) continued to remain range-bound in a possible 5 month-long symmetrical triangle. Over the past few weeks, the ETF managed to push above its 200-day (40 week) long-term average. I'm tracking the 200-day moving average as a trend indicator. The upper boundary of the 5 month-long symmetrical triangle is acting as resistance at 74 and the lower boundary is acting as support at 70.4 levels.
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Until a chart pattern is mature and ready to resolve in one direction we have to make minor adjustments to the chart pattern boundaries. (Learn more: Morphology) Dealing with chart patterns and breakouts in real-time is difficult compared to labeling chart patterns on price charts in hindsight. Corrective periods are more tricky compared to trend periods because market corrections are periods of indecision between buyers and sellers whereas trend periods show consensus. The iShares MSCI All Country World Index ETF (ACWI.O) is going through a corrective period. The 5 month-long choppy sideways movement is possibly forming a symmetrical triangle between the boundaries of 70.4 and 74. This week's price action pushed the ETF above its long-term average. For the long-term uptrend to resume, price should remain above the 200 day-average.
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A bullish engulfing is a pattern that forms when a small black candlestick is followed by a large white candlestick that completely eclipses or “engulfs” the previous day’s/week’s candlestick. As implied in its name, this trend suggests the bulls have taken control of a security’s price movement from the bears. This type of pattern usually accompanies a declining trend in a security, suggesting a low or end to a security’s decline has occurred.
Where a bullish engulfing candle forms in the context of a trend is one of the most important factors. When a bullish engulfing candle forms at the end of a downtrend or at a support level, the reversal is much more powerful as it represents a capitulation bottom.
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If anybody tells you, "I know what the markets will do in the following weeks" he or she might be guessing. I will try to be as objective as possible with some of the major equity benchmarks and convey the message of my chart analysis. After the Jan-Feb 2018 sell-off on the ACWI ETF, price remained range-bound. The consolidation formed a possible 4 month-long symmetrical triangle (can act a bearish continuation). Both the lower boundary of the consolidation and the 200-day (40 week) moving average formed support around the same level. After each test over the past 4 months, the ETF rebounded from the 200-day moving average.
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Once again the iShares MSCI All Country World Index ETF (ACWI.O) reverted back to its 200-day (40-week) moving average. The long-term average at 71.40 levels is also the lower boundary of the 4 month-long symmetrical triangle chart pattern. Breakout from the last 4 month's consolidation will be important for Global equity markets performance. A breakdown below the lower boundary of the 4 month-long symmetrical triangle will push the ACWI ETF below its long-term average, possibly reversing the last 2 year's uptrend. Following charts review the Emerging and Frontier Market ETFs that are already trading below their long-term averages. The boundaries of consolidation for the iShares MSCI All Country World Index ETF remains between 74.3 and 71.4 levels.
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