Technical Analysis Experiment

The european index is clearly in a new positive trend: it broke the red channel with high volumes after a MACD Divergence bouncing on the sma200.  Usually when it breaks a long channel it should have a pullback on it or near it with smaller volumes. Instead this time it had lateral movement with low volumes under a long trend line (the gray one).  This can be read as a weak pullback meaning the beginning of a strong positive trend. The trend is positive so we have to wait the lower part of the green channel to buy. Now that is passed over the gray trend line we can risk a to buy a   small  lot with a stop just below the gray trend line or below the green channel, and wait the lower part of the channel and bigger confirmation from the volumes to put a bigger lot on the market. 

After a MACD Divergence the prices broke the red channel with high volumes and went to test the gray trendline. We can expect a pullback near T1 where we should buy or a strong acceleration after breaking the gray trendline.  Either way stop a bit inside the red channel.

T1 and T2 are test zones: the price should go down to T1 and there have a pullback on the old bear channel. IF the pullback is positive T1 is a good buy spot and the new trend will be bullish. The change of trend have been anticipated by the MACD, the prices have broken the channel and now they are testing a strong support (3500) with MACD and Stocastic in overbought. So: prices should go to T2 and from there if the test is positive BUY. A more risky operation is selling now: it is an operation versus the current trend, and NEVER FIGHT THE TREND.