Technical Overview by Nicholas Winton, Hedgehog Trader and @HedgehogTrader on Twitter
Thank you for joining us in a technical look at the mid-cap oriented INK Canadian Insider (CIN) Index. A week ago, we saw the CIN Index seemingly sag after failing to hold the 1020 level for more than one day. Since then, we can see the Index parlayed its downward force into upside thrust as it bounded off its 50-day moving average, solidly clearing 1020 support.
While the Index itself has seemingly made little progress, having snaked along and gained a mere 1.5% since its September high, it has gained over 6% since the start of October and its chart is showing signs of a powerful acceleration phase that could surprise investors.
For one thing, its MACD oscillator is again turning higher, but even more importantly, its near-term momentum gauge, Relative Strength, which briefly dipped under 50 has impressively surged back above 60 to 62.4, reaching its highest levels since June! What's also bullish is that the CIN Index has forged a series of higher lows in October and looks to be coiling for a big pop to end the month. In fact, Friday's action was particularly bullish, as the Index gapped up at the open and held those gains into the close.
With 1020 now overcome, that long-time resistance now becomes support. Going forward, we have a few upside targets/resistance areas to watch. The first is 1040 where the top bollinger band sits. A second important resistance level is the Index's 200 day moving average around 1056-1060. Further up is the 1080-1090 level which marks the top of its current trading channel and major resistance. The week ahead should be quite interesting.
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