ASX Shares Daily – 26th July

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By Chris Becker

These daily updates need to be placed in context with the longer trends and drivers amidst the overall technical picture, so head to Macro Investor for a free trial. Former “Trading Week” readers will find it reborn asTechnicals“, published 8.30am each Monday morning.

Markets around Asia today were mixed – and today is another reason to not just take the ASX200 close as the be all and end all. Although the local bourse finished up 23 points, or 0.6% – a good solid day – closing at 4147, and the Nikkei 225 put on almost 1%, right now the Shanghai Comp has dropped nearly 0.5%, crumbling through its intraday December 2011 lows, with the 200 day moving average providing strong overhead resistance.

Not a good sign for Chinese equity markets followers – or those who follow iron ore….

On currency markets, the Aussie has surged in afternoon trade, now above 1.03 against King Dollarr and trying to get back to its mid-July high around 1.045

The Euro/USD hasnt moved much and remains in a downtrend over the last couple of days, ECB speculation not withstanding,whilst the US Dollar Index (DXY) has come back a bit to 83.57 points but remains strong.

AS i mentioned earlier today gold (USD) maybe finally doing something – we’re getting closer to a resolution between the bears, bugs and bull’s with prices staying above the $1600USD mark on spot markets. 

In AUD terms,it remains under pressure due to the high (bubbliciious?) local currency, just at $1554AUD per ounce.

Australian Stocks

Looking to the table at the left showing all the sectors and ASX8 stocks (the top four banks – Megabank – and the top four miners) it was a broad move across the board, with discretionary stocks doing the best, and healthcare stocks taking a breather.

Not much action in the ASX8 – except Newcrest (NCM) which announced it had met production targets for the full year, including its Lihir mine, and looks like it might get back on track…

I’ve just finished a trade in Macro Investor on a gold stock, with another one pending – one is short, one is long…

Anyway, here’s today’s top movers and losers in the stocks we follow in FARM (just over 450):

As to the index itself – it looks like that huge amount of intraday buying yesterday was supported again today – the market wants to rally, and indeed valuation estimates each week are getting higher and higher. The technicals speak a similar tune, but we are still in a bear market:

The medium term technical picture here remains unclear with support at 4000 points and resistance at 4220 or so (the 200 day moving average) as the key levels to watch.

Don’t miss the overnight market updates by my colleague Greg McKenna, in MacroBusiness Morning tomorrow morning.

Chris Becker is an investment strategist at Macro Investor, Australia’s independent investment newsletter covering stocks, trades, property and fixed interest. Each week Macro Investor publishes tables on the top ten most undervalued and overvalued stocks on the ASX. A free 21-day trial is available at the site.

You can follow Chris on Twitter.

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