May 18, 2009
Westfarmers Broken Past a Major Weekly Support Line
By Planet Wealth
WES (Westfarmers Limited) has broken through some significant points of support this week. If we take a look at the weekly chart, we should be able to get an overview of how we would expect the stock to behave in the coming weeks.
Peaks and Troughs are key indications for chart reading. When Lower Peaks (LP) and Lower Troughs (LT) start to form, the price of the stock is being pushed down. This tells us the sellers are in control. As you can see with WES it has been producing these major LP and LT since the high in June.
Something to take note of now, is there has been the first set of LP and LT formed below the Moving Averages (MAV) cross over. This is a strong bearish sign.
There has been a down trend channel made out of these LP and LT toughs, where the stock was finding support and resistance. This week, not only has WES broken out of this channel, but it has also broken past a major weekly support line, with no other support in sight until $27.35.
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