ASX Shares Daily – July 31

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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.

Another month gone, and the ASX200 continues to lift itself off the deck, rising another 0.5% or 23 points to 4269 – check the bottom of the post for a full roundup including technical analysis of the bourse itself.

The Nikkei 225 did a little better, putting on 0.7%, continuing to bounce off the 8300 point low with 9100 points the resistance level above, now at 8695 points – remember I noted yesterday the correlation with the AUD/JPY cross? (in red below)

The Hang Seng surged nearly 1% and is getting somewhere near the completion of its medium term symmetrical triangle:

But again its the Shanghai Comp that disappoints, down 0.3% to 2104 points, now well below its January low and maintaining its downtrend. In other Asian markets, the Singapore STI closed slightly down, still hitting resistance around the 3000 point region, wanting to break out, the KOSPI though had a cracker – up 2% with a chart pattern similar to the Hang Seng above.

On currency markets, the Aussie surged on the building approval figures earlier today but have come straight back to be just over 1.05 moving into the European session, while the Euro/USD is looking weaker as well, struggling to get back over 1.23 against King Dollar. The US Dollar Index (DXY) is obviously reflecting this weakness back as strength and is flirting with overhead resistance at 82.8 points.

Gold (USD) remains on tenterhooks – oscillating around the $1620USD per ounce level for the last 3 days – this still remains a relatively easy trade to manage – the resistance level is obvious to all, but we await the NFP later in the week:

In AUD terms the weakness remains as the currency remains strong, currently at $1544AUD per ounce.

Aussie bonds were sold off slightly today, the 10 year yield currently just below 3.1% – Euro bond markets have opeend and its all quiet – Italian/Spanish yields have sold off by a point or so, whilst core bonds are being bought.

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), the good mood wasn’t shared around, as healthcare (the day I do an op-ed on them! ha!) down, alongside consumers stocks and industrials. It was the day for energies, with the big players Origin (ORG), Santos (STO) and Woodside (WPL) all having good days on positive reports.

The main action in the ASX8 was Rio Tinto (RIO) – up 1.7% – all because its sacking some office staff? Hmm.

As to the index itself, today’s action builds on the breakout above the closely watched 200 day moving average. I still expect a retracement in coming days as “profit is taken”, and we saw lots of intraday selling today, which is healthy for this trend to continue:

Don’t miss the overnight market updates by my colleague Greg McKenna, in MacroBusiness Morning on Monday and see you tomorrow.

Chris Becker is an investment strategist at Macro Investor, Australia’s leading 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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