CapitaLand Ascott Trust (SGX: HMN) A potential bounce to retest the resistance zone at 0.960-0.995 in the current downtrend as:   

1. The price formed a potential bullish reversal morning star candlestick pattern on 26 October at the support zone of 0.870-0.890 confluent with the swing low of 0.875 made in early October last year.
2. The Moving Average Convergence Divergence (MACD) technical indicator is displaying initial signs of bullish momentum where it made a fresh bullish crossover today.
3. The price could reach the resistance level at 0.995 which is confluent with the downtrend resistance line and 50% Fibonacci retracement using the recent swing low of 0.870 and recent swing high of 1.17. From an Elliot wave perspective, the wave 3 reached a 200% extension from the wave 1 and we could see a retrace to the resistance zone to form the wave 4 in this downtrend.

*Expected timeline of the trade is 13 weeks from the date of report issuance.

CHART LEGEND

Red box = Resistance zone

Green box = Support zone