As we mentioned in our previous report on June 11, the bearish formation has been completed and the index breached its neckline and head to the downside. Nonetheless, this pattern failed to preserve the downside movement after the index failed in closing on a daily basis below 1749.00 to reverse to the upside providing a falling wedge over daily basis. 
The index breached the wedge’s resistance signaling that the downside correction which started with the breach of the general trend support has ended and the index will continue the medium term upside wave. The 100 Days MA is strong resistance ahead the index around 1855.00 supported by overbought signals on Stochastic and might cause some fluctuation and volatility, yet in general we favor the upside move targeting initially the horizontal resistance at 1909.00; this level might restrict the upside move and cause a downside correction before heading towards the previous bullish wave. In short, technical factors point that the correction ended and the index settled for areas around 38.2% Fibonacci for the entire upside wave from 1017.75 towards 2058.50 in addition to the falling wedge which the index breached its resistance. We favor the upside move over short term basis targeting 1909.00 and then far ahead at 2058.50 which is the gateway into the breached medium term ascending channel. The negative pressure and breaching 1795.00 will extend the downside correction targeting areas from 1660.00.
By: Yasir Mubarak
Senior Technical Analyst
[email protected]
www.ecpulse.com