The EuroTop 100 ($EUR) has further room to run after breaking out of a bullish continuation pattern. The price chart shows the index basing from March until November and then breaking above a major resistance zone in early December. After a 13.1% advance in nine weeks, the index paused with a five week consolidation (blue box). The breakout over the last few weeks signals an end to the consolidation and a resumption of the bigger uptrend. A similar 13% advance from the consolidation lows would extend to the 3150 area.
The December breakout coincided with a golden cross in two long-term exponential moving averages. The indicator window shows the PPO(10,40,1), which measures the difference between the 10-week EMA and 40-week EMA. This PPO turns positive when the 10-week EMA crosses above the 40-week EMA and negative when the 10-week is below the 40-week. Notice that the PPO turned positive in early December and remains positive to affirm the current uptrend.
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--Arthur Hill CMT
Plan your Trade and Trade your Plan
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