INK Canadian Insider Index blasts through resistance

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Updated - replaces chart and corrects weekly gain to 21 instead of 41; corrects RSI and MACD numbers in the first sentence of second paragraph

Thank you for joining us in a weekly technical look at the mid-cap oriented INK Canadian Insider (CIN) Index. As promised in this blog a few weeks ago, volatility has indeed returned to the INK Canadian Insider Index. Last week, the INK CIN pulled off the old "shake and bake" maneuver, in grand style, no less. For the Index, having given up a 14-point gain three weeks ago by way of a disheartening 19-point loss one week later, skyrocketed 21 points last week to close at 1211.52. In fact, the INK CIN's surge was so powerful that it sliced like a razor through a major downtrend line that has capped it for more than 6 months. What's more, the Index now finds itself within striking distance, or 6 points, of its all-time highs, set back in February.

RSI soared as well, clearly breaking its own downtrend resistance line in the process. It raced from 59 to 72 for a whopping 22% increase. The MACD fast blue line crossed decisively above its slow blue line, giving us the most compelling technical buy signal than we've seen in some months. As I've mentioned before, I see the key to the INK CIN making a truly sustained breakout as its MACD breaking out above the 5-10 level which has held the Index in a trading range.

Support now rises to 1200, with additional support at 1188 (20-day moving average) and 1179 (200-day moving average). Resistance lies at 1210 and 1220 above.

The long-term chart of the INK CIN now displays a very bullish long-term cup pattern that began to form back in March. Should the Index embark on a further advance that marks a new all-time high, such a move could set the Index on course for a substantial rally to 1300 or more.
 

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