The INK Canadian Insider Index Expands Its 'Box' Consolidation

Technical Overview by Nicholas Winton, Hedgehog Trader  and @HedgehogTrader on Twitter

Thank you for joining us for our weekly technical look at the INK Canadian Insider Index. In our last update, we observed the Index was locked in a very tight range between 980 and 1020 and that converging trend-lines would soon force it to make a move.

What happened next was a white-knuckle slice through its 980 support down to its must-hold support at 960, just as many of the financial markets corrected last week. However, that moment of panic did not spoil what I view as a bullish consolidation. For in tandem with the US market, the CIN Index stopped its descent, turned and boldly reversed higher, closing the week at 988.

What's interesting is that by dropping down to the 960s temporarily, the Index in effect enlarged the size of its box-shaped consolidation pattern and bought itself more time to build up momentum for an attempt at a breakout. We can see MACD dipped on recent market weakness but the Relative Strength Indicator has already rebounded from its dip and remains firmly in a multi-week uptrend.

The key area to watch is 1000, since the Index's down-trend line from July caps this level and provides important resistance. 960 is now the key support.

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