PSI Portuguese Index Weekly Chart Ascending Triangle Potential Bear Flag

Portugal equities market has dropped dramatically since the Euro woes accelerated early last year. The green lines show the positive divergence bounce in Fall 2011 and the indicators remain long and strong, which is constructive for bulls. The blue lines show an ascending triangle in progress, reference a daily chart to study it further, so the range forward is 5500-5700, a break up thru the base line in the 5650-5700-ish range would project a move to 6000 based on the vertical side of the blue ascending triangle.

A potential pink bear flag pattern is in play now. A potential outcome moving forward is for price to move up towards 6000 and then set up the second leg down for the bear flag which would target a much lower price in the 3500-ish area. The ADX shows an uber strong trend was in place as price plummeted in 2011, thus, that type of momo usually wants to see another low in price (lower than 5250) at some point forward.

The 20 week MA under the 50 MA is very bearish, but, price now moving above the 20 MA is bullish which verifies the green lines. Projection is difficult for a chart like this, especially since the news from Europe can change in a heartbeat, but a move up towards 5700 appears possible which may create negative divergence and still contain the ascending triangle, then down from there to print lower lows sub 5250. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.