By Chris Becker
Risk appetite surging as US Dollar and Yen weakness continues – most of Asia is up today (except Shanghai Comp) with the ASX200 putting on a strong 1% day to finally crack 4400 points – for a full roundup, see below including technical analysis of the bourse.
The Nikkei 225 is building on its breakout above 9200 points on the weak Yen (USDJPY in red below):
The Aussie dollar continues to oscillate with a medium term bullish bias, staying just above its 200 day moving average, but below its trend channel – on a road to nowhere (again, look at the weekly or monthly charts)
The US Dollar seems to be rolling over in the short term, heading back to its 200 DMA:
Which is keeping gold (USD) within its tight support and resistance channel on the daily chart but with a bullish bias (look at those tails underneath the daily candles = buying support):
Australian Stocks
The winner today was the Telecomm sector – or Telstra (TLS) in other words, at a new high. But its fired off my proprietary KC Signal – a top/bottom signal – and looks very overbought here with no dividend (which is what people are chasing) until February. Funnily enough, the other staples – Wesfarmers (WES) and Woolies (WOW) – are also up today and well bid in the last couple of months:
As for market itself, having bounced off the closely watched 200 day moving average, its found its straps but I still think will hit heavy resistance overhead at the April 2011 high at 4440 points. The RBA needs to cut next month to keep this freight train of an overvalued market slugging along – as does every major stock market around the world with its respective central bank. Welcome to The Great Volatility – got hope?
This free daily update should be read alongside Live Trades articles, published every morning at Macro Investor, and placed in context with the longer trends and macro drivers within the overall technical picture, where Former “Trading Week” readers will find it reborn as “Technicals“, published 8.30am each Monday morning at Macro Investor. Chris Becker is an investment strategist at Macro Investor, Australia’s leading independent investment newsletter covering stocks, trades, property and fixed interest. A free 21-day trial is available at the site. You can follow Chris on Twitter.
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