AusGroup closed unchanged

AusGroup closed unchanged at 68.5c, forming an inverted black hammer in the process. This was after forming a doji yesterday. Both candlesticks are signs of a possible reversal. Volume on both days were relatively low which suggests that the selling pressure is probably easing and AusGroup has found support. The flattening 100dMA happens to be at 68.5c. Over a longer term, the MFI is still uptrending and the counter's current weakness might just be temporary. The fast rising 200dMA is a positive. A hedge at 68.5c for someone who does not yet have a position in this counter is not a bad idea. To accumulate, I always like to buy on the way down at every support level. 68.5c looks like one to me. If 68.5c breaks, the next support is at 66c.

Resistance is provided by the rising 200wMA at 74.5c which also happens to be the most recent high achieved on 5 Jan 10. Overcoming this resistance level would give an intial target of 78.5c and an eventual target of 83c, a candlestick support level which broke decisively in June 2008.