TEDPIX, the gauge for Tehran Stock Market has gained positive momentum during last week by coming out of the tight range which had been fluctuating in so far, breaking very tough level of 81,000 points which had failed to pass through for several times before. Optimisms around higher oil prices along with price jumps in base metals worldwide specifically steel and copper prices due to concerns surrounding the US dollar in recent weeks, are among the reasons influencing the so-called gains.

In this post, we are going to analyze the continuation or reversal probabilities of the recent move in TEDPIX as well as support and resistance areas with the aid of technical analysis.

Below is the chart of TEDPIX on a daily basis and as it is obviously shown, there had been a bullish triangle formed after TEDPIX retraced from its all-time high at 89,723 points.

ted1

As mentioned earlier, this triangle has been broken up from 81,000 points and now this area has been turned to a significant support zone.

This break out is of much more significance as it’s occurred above 61.8% level of the correction from all time high to the low of 61,064 points. According to the Fibonacci retracement, the 78.6 % level at around 83,500 points is the nearest resistance zone on TEDPIX’s way up. From the patterns point of view, the target of this bullish triangle is located at the chart’s peak, around 90,000 points. Meaning that the mentioned near-term resistance at 83,500 points would not be considered as a crucial zone and it is sooner or later be broken to test our main mid-term target of 90,000 points.

The previously mentioned bullish evidences are also backed up with a crystal clear bounce back from the life time trend line which has occurred quite simultaneously from a significant timing level, which totally raises the probability of TEDPIX’s rise in future.

From the timing perspective, it took 64 trading days for TEDPIX to recover losses from the end of the correction at 61,000 level to reach to 81,600 (shown in the chart below). Not only it is one of the Fibonacci sequence numbers, but also lots of important ratios has been derived from. The Fibonacci time expansion have been shown in the chart below.

ted2

Concluding from all mentioned evidences, we are biased to upside as TEDPIX has just recently broken up a major resistance and is heading to our main targets of 90,000 and 96,000 points accordingly. On the flipside supporting zones are located at 81,000 points initially and the life time trend line at around 79,000 points.