The steady rise of the Australian ASX 200 index has slowed and is developing the potential to turn into a downtrend. The fall below support near 4,980 has confirmed a change in the trend. This has the potential to develop into a technical correction.
A fall of less than 10 percent is called a technical trend correction so the underlying uptrend remains in place. A fall of more than 10 percent is a trend change. A 10 percent technical correction has a target near 4,644. This is an arithmetical calculation and has no relationship to support areas in the market. The nearest support level is near 4,560.
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The fall below 5,100 and the move below the uptrend line B signal a change in the market. Support near 4,980 has failed. The underlying uptrend is also weakening as shown by the narrowing of the spread in the long term Guppy Multiple Moving Average (GMMA). A weak rebound rally may develop but it does not come off a well formed base.
A rebound from the lower edge of the long term GMMA near 4,900 is bullish. A rebound from this level has resistance near 5,100. This is a long term historical resistance level. A move above 5,100 is capped by trend line B acting as a resistance barrier.