Not my desk...
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 as “Technicals“, published 8.30am each Monday morning.
Asian market had a great day today – except again in China, were sceptisim abounds. The ASX200 closed up 1.5% or 62 points at 4209 points – check the bottom of the post for a full roundup including technical analysis of the bourse itself. The Nikkei 225 did the same, putting on 1.4%, bouncing off the 8300 point low with 9100 points the resistance level above:
The Hang Seng did the right thing – shooting up 2% – whilst the Shanghai Comp continues to disappoint, and barely closed in positive territory at 2128 points, which was also followed by the Singapore STI, the worst performers in the region. Right now the Indian markets are up 1.4% or so, Jakarta up nearly 2%, and European markets have opened positively, with the EuroStoxx up around 0.3%, the Spanish and Italian markets doing the most moving (around 1%)
On currency markets, the Aussie has surged again in afternoon trade, now well above 1.04 against King Dollarr and trying to get back to its mid-July high around 1.045 but hitting resistance, at least on the daily charts:
The Euro/USD had a massive spike above 1.23 not too long ago but has settled down again just below, the most recent bullish moves taking out a lot of shorts as the ECB moves markets once more! The US Dollar Index (DXY) remains close to breaking its short term uptrend from the May lows:
The anti dollar gold (USD) is moving and shaking – having broken out of its medium term triangle pattern, now heading for resistance at $1625-1630 USD an ounce:
Because of the bubbliciiousness bullishness for our local currency, gold in AUD terms remains under pressure 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 looks like unicorns and rainbows once more!
It was a broad move across the board, with health and materials stocks doing the best, the only laggard utilities.
Financial stocks look like breaking out on the weekly charts – back to their pre-May 2011 correction support level:
Healthcare stocks look set to clear their pre-GFC levels:
There’s a few more interesting sectoral charts to look out in that bunch and you’d be surprised to see how many are in outright bull markets – and which ones continue to despair (discretionary comes to mind!). Might have a closer look on MB next week – but in Stocktake each week in Macro Investor we go into more detail (and timely).
The main action in the ASX8 is Newcrest (NCM) following on from its good results yesterday, the stock has surged again – for mind there’s no buy signal as yet, since everytime it hits the 50 day moving average it is sold off – can it break through this time?
As to the index itself – well it looks promising doesnt it?
Although the pattern is a rising wedge (which is normally a bearish reversal in my book) you can’t help but be bullish. Today’s big bullish candle is one reason, but the next is the series of higher lows and the clearing of the closely watched 50 day moving average:
I’ll have more to say in my Technicals piece on Monday morning, but right now the medium term technical picture still 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 on Monday and have a good weekend.
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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