By Chris Becker
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Might be time to leave that green green picture up there hey? The ASX200 is continuing its good run, now up 8.2% from its recent lows, and up nearly 0.5% again to breach 4300 points for the first time since mid-May (it seems so so long ago…I need a holiday). I’ll take a closer look at the bottom of the post for a full roundup including technical analysis of the bourse itself.
The Nikkei 225 did even better – again up nearly 1% – while the Hang Seng is currently down 0.3%, the Shanghai Comp is barely up, but still looking like breaking out from its bottom at 2160 points.
Colin Twiggs, owner of Incredible Charts, has some good charts on Asia from his trading diary, which is a great follow:
Here’s Singapore – which is bucking the downtrend breaking out to a new high:
On currency markets, the Aussie has settled back to 1.055 going into the evening session, whilst the Euro/USD has slipped below 1.24 with the USD again, down about 40 pips since last night. The US Dollar Index remains the one to watch, having sold off in the last couple of days, now slowing coming back at 82.39 – I reckon if it breaks below 82 this rally will continue a little while longer, but it really needs legs below 81 to get things moving into a proper rally:
Gold (USD) is becoming more bullish and remains around the $1610USD per ounce level. In AUD terms, it continues to struggle under a lot of weight of resistance, remaining at $1523AUD per ounce .
Australian Stocks
Earnings season continues with Rio Tinto (RIO) reporting after the close, whereas Stockland (SGP) closed down 5%, Computershare (CPU) was up 6% on a good outlook. Let’s look at the weekly chart of the ASX200, which is now sitting on the 200 day moving average – a bullish sign for sure – having broken free of short term resistance at 4270 points and looks set to continue on its way up to 4400 points:
If it can crack this level – we could have a new bull market on our hands. But if you’re looking at the ASX200 in isolation, you’ll know the probability of that is low – all eyes remain on Europe and the US. The global economy is slowing – don’t confuse bear market rallies and bounces with secular bull markets. But don’t sit on the sidelines either!
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.
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