Canadian Insider Index tumbles 2.5%, falls below 200-day moving average

Thank you for joining us in a weekly technical look at the mid-cap oriented INK Canadian Insider (CIN) Index. What a difference a week makes. Not surprisingly, the Index ended its period of low volatility and its tight trading range once the Federal Reserve hiked rates 0.25% last week. The INK CIN which had displayed signs of building bullish momentum in weeks prior, stumbled hard last week and, on its way down, sliced easily through its 200-day moving average support at 1161.80. The Index came to rest at 1149.79, near the lows of the week, for a loss of 30 points or 2.5%.

RSI plunged 40% 19.17 points to 30.44. MACD followed suit, falling to -3.92, with a loss of nearly 5 points and a return to the negative side of the ledger.

Resistance is now at 1162 (formerly support) and 1174 above that.

Support sits at 1149 or so (which has held on three prior occasions) and, below that, at 1135.

It goes without saying the INK CIN now faces considerable bearish pressure having broken down through its consolidation pattern and having lost its 200-day moving average. That said, with its RSI being as low as it is, the Index could bounce strongly, as it has not fallen below 30 since January 2016, and, prior to that, in August of 2015. The Index has also pierced the lower Bollinger band, so we'll be watching for a potential snapback. Of course, the size of a rebound (and retaking of key supports, such as the 200-day M.A.) will be key to the strength of the Index going forward.

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