Who is going to breakout first ?
This week we are looking at two European sectors that seem ready to breakout. The Media as well as the Chemical sector.
The Media sector has been in a 4+ years long basing pattern. The right end of a basing pattern is formed by the sellers keeping their supply at the same level, while the buyers, on the other hand, are always coming at an earlier stage, higher level, to buy, showing increasing demand, which in turn, is bullish.
Here's the Lyxor Stoxx600 Media sector:
The price action of the Chemical sector, created an inverted head and shoulder, which in this case is a bullish continuation pattern rather than the commonly known reversal of trend, as the sector is still in an uptrend (as shown by the blue trendline).
Here's the Lyxor Stoxx600 Chemical sector:
The price needs to close above the supply area to confirm a breakout (i.e., all the supply as been absorbed). Until that happens, the resistance level remains in place.