By Chris Becker
Its been a mixed day on Asian markets, with the ASX200 finally finishing in the green, up 13 points or 0.3% to 4329 – I’ll take a closer look at the bottom of the post for a full roundup including technical analysis of the bourse itself.
Japanese (and Indian) markets are the outcasts, with the Nikkei 225 falling 0.6%, but Chinese markets are having a ball – the Hang Seng is up by 0.3% whilst the Shanghai Composite is up only 0.5% currently, the other mainland markets are up nearly 2% as the slowing PMI raises bets that stimulus is on the way. Maybe.
The Aussie battler (AUD/USD) is still heading south, as it should be, now at 1.026 and reacting negatively to the poor local data today. The Euro/USD is tightly wound at 1.257 awaiting the European session, as the US Dollar Index falters, now at 81.2 points:
Gold (USD) is consolidating after its big breakout on Friday, and with no trading tonight on US markets, it maybe a woolly ride through to tomorrow. Its currently at $1686USD an ounce, but in AUD terms the story remains one of strength, for now, just under $1645AUD per ounce
Australian Stocks
Earnings season is almost over, just a few stragglers left thank Dog. Today saw another big rise in staples stocks – Woolworths (WOW) cracked $30 for the first time in nearly 2 years and Wesfarmers (WES) cracked a new 4 year high- and in the ASX8 (the top four banks and miners) we saw solid bids for Megabank, which I think is overextended at current levels, whilst the miners had a bit of a respite.
On to the index – as I said in my Technicals wrap this morning on Macro Investor (over 30 charts and technical analysis of all major macro markets), I thought a retracement back to the 4200 point zone was necessary for this current rally to have more than just jelly legs. There’s still significant resistance at the 4400 point level here:
These daily updates need to be placed in context with the longer trends and drivers amidst the overall technical picture, where Former “Trading Week” readers will find it reborn as “Technicals“, published 8.30am each Monday morning.
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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