Happy New Year Traders!

This week we will see the increase of volume on the market with large fund managers  and institutions coming back on board from the holiday season. With low volume over the last couple of weeks, we have seen alot of consolidation on most stocks in the top 20, which is all good for the short term trader as there is bound to be a few break outs over the next week or two so lets get ready.

Let’s take a look at what The XAO did over December on the weekly chart. After a touch of a 3 way support (10 year up trend line, weekly support and down channel all crossed at the same intersection) in the second last week of November, the XAO proceeded to form a small symmetrical triangle. Last week (first calendar week of the year) The XAO broke through the top of the down channel and also out of the symmetrical triangle.

The next area of major resistance is around 3900. Will this break out give the XAO enough power to make it?

(click on images to enlarge)