Our last article outlined a 2-stage confirmation required to confirm if a sustainable bottom is in place. The prices managed to break and stay above line T1 and are now trading close to an important resistance level 7241. Though the price action is not as convincing. In light of this the coming week becomes very crucial.
Specifically if the markets would like to retest the recent lows of 6879. Then the rally to current levels might suffice as the market if very close to providing the second stage confirmation for the bottoming out process.
In order for this upward momentum to continue we would like to see a break of 7241 followed by close above the T2 trend line (which might be around 7320 or lower depending on when prices reach). If this materializes it is very likely that the market may gain a very strong momentum and we may hit 7550-7600 as soon as this week. These developments would signal to us that the Z-leg of triple zigzag has bottomed out. It would also confirm a relatively shorter term target of close to 7900 for our pattern.
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