INK Canadian Insider Index rejected at 1200, falls 9 points

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Thank you for joining us in a weekly technical look at the mid-cap oriented INK Canadian Insider (CIN) Index. The Index looked to be building up a healthy head of steam in our last update. Its newly acquired momentum helped it charge toward the 1200 level, but the major resistance zone swatted the Index away with ease, and the INK CIN endured a quick free-fall to its 200-day moving average at 1157. The Index ended up bouncing 20 points at week's end to finish at 1178.90 for a loss of 9 points on the week.

Our short-term momentum indicator, RSI, fell 4.5 points to close at 46.84. RSI once again plunged sub-40 before bouncing strongly. As we noted in our last update, such readings have preceded important bottoms. We also note that from late-February to early-March, it actually took several touches of this level before the Index brought its skid under control and embarked upon a significant rally.

Our long-term MACD indicator dropped 0.14 to -0.475 and switched back onto a sell signal.

Resistance is strong at 1200 and 1190. Support sits at 1162 and 1156 (200-day moving average).

The Index has made both higher lows and lower highs recently, showing a convergence of bullish and bearish price trends is underway (as our blue and red arrows indicate). Hence, without clearer indications we are left to await a resolution of direction. While the bullish reversal of the Index after piercing the lower Bollinger band (as we witnessed last week) tends to generate an initially bullish reaction, the powerful wall of resistance at the 1200 level suggests the Index needs more time before it can successfully force its way through it.

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