The bulls were out in force today in Asia, even though the Japanese trade deficit blew out, the news the Chinese authorities eased reserve ratios for lending (hence signalling a slowing Chinese economy) boosting risk-on plays across the board, with the S&P/ASX 200 Index gaining 60 points or 1.4% to 4256 points, regaining all of Thursday’s losses:
Other Asian markets were positive, but not relatively, with Japan’s Nikkei 225 up 1% to 9485, well above resistance at 9000 points and building on its breakout whilst the volatile Hang Seng is currently flat up only 0.1% as the Shanghai Composite is up only 0.3% or 7 points to 2365 points, still dicing with the upper level of its long term downtrend channel.
The AUD remained resilient, remaining above 1.07, with the US Dollar Index remaining stable at 79.2 points, slipping ever so slightly as risk alga’s are turned on again.
WTI crude rallied strongly, gaining over 1.6% to be at $104.89USD per barrel in a worrying sign for US economic strength, whilst gold had another solid day gaining nearly $12 to $1735USD an ounce, whilst in AUD terms the shiny metal is currently at $1610AUD an ounce.
Movers and Shakers
A unicorn friendly green board, with all sectors gaining except the Telecomm sector, only down because Telstra went ex-dividend today, whilst the biggest gainers were the materials – or holes – stocks. What else.
Checking out the ASX8 (the top four banks and miners who collectively provided more than 90% of profit growth last year), ANZ finished up 1.8% breaking out on the daily charts, with overhead resistance at $22 per share very clear on the weekly chart:
The big brother of banks, the Commonwealth (CBA) fell over 1%, but this is actually bullish, as it went ex-dividend and should have fallen over 3% on current yield. A bullish signal would be the market reacting in the short term pushing the country’s largest building society up above $50 again.
National Australia Bank (NAB) was up 2% and still proving to be the worst price performer, going sideways whilst Westpac (WBC) has bounced from its support at $20 a share, up 2.5% but also still technically in a sideways funk like NAB.
Quickly checking out Macquarie (MQG), the Millionaire Factory was up almost 3%, the silver doughnut building on its recent breakout and now above its long term moving average. Probably too late to buy the previous dips on a risk/reward basis..
To the holes, where BHP Billiton (BHP) pushed the market up strongly by rising over 2.3%, but still relatively week and going sideways in the medium term, stuck in a trading range with a potential bottom at $34 a share. Without a big rise in the Big Australian don’t count on the broader market moving anytime yet.
Its “twin” Rio Tinto (RIO), was up 2.2% and also remains in a trading range, with resistance at $70 per share and support at $59 a share.
Gold miner Newcrest Mining (NCM) jumped up nearly 4%, reversing the possible break of its short term uptrend, and to finish out the ASX8, Woodside Petroleum (WPL) was up 1.6% and looks like investors are matching the gains in WTI oil prices with WPL, with a possible bullish breakout above $36-37 range on the cards.
The overnight futures for the ASX200 have gained around 5 points while other equity futures are bullish with the Dow Jones set to open above 13000 points. Not too much , with Europe up and US down, with not much data to go on, after absorbing Asia’s flow today.