Australia: S&P/ASX 200 (.AXJO) dip as banks fall on CBA spin-off plans; NZ treads water

Australia: S&P/ASX 200 (.AXJO) dip as banks fall on CBA spin-off plans; NZ treads water

Australia: S&P/ASX 200 (.AXJO) dip as banks fall on CBA spin-off plans; NZ treads water

  • Banks drive Aussie shares lower
  • CBA drags the benchmark
  • Materials and energy stocks cap fall

Australian shares slipped on Monday as declines in banks offset gains in materials and energy stocks after Commonwealth Bank of Australia stepped up plans to spin off its wealth management business as the industry grapples with a series of scandals.

The S&P/ASX 200 index .AXJO fell 0.2 percent or 14.8 points to 6,210.40 at the close of trade, not far from its best close in more than 10 years struck last week. The benchmark declined 0.1 percent on Friday.

Index heavyweight Commonwealth Bank of Australia (CBA) CBA.AX said on Monday it would step up plans to offload its wealth management businesses as it looks to become a smaller lending-focused bank, as well as announcing an overhaul of its executive ranks.

The announcement drove Australia’s top lender’s stock 2.3 percent lower, making it the biggest drag on the benchmark.

The negative sentiment clouding CBA hit the wider financials sector .AXFJ, which slid 1 percent. Others members of the “Big Four” fell between 0.6-1.1 percent.

But the benchmark’s fall was restricted by a rally in materials and energy stocks, underpinned by higher commodities and oil prices.

Global miner BHP BHP.AX firmed 1.4 percent and was the biggest boost to the benchmark, while its rival Rio Tinto Ltd RIO.AX jumped 1 percent

Meanwhile, Woodside Petroleum Ltd WPL.AX gained 1.5 percent and was the dominant gainer among energy stocks.

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 6,046.02.

The projected upper bound is: 6,299.30.

The projected lower bound is: 6,137.30.

The projected closing price is: 6,218.30.


A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 85.0230. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 19 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 68.97. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 127.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 8 period(s) ago.


The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 6 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -14.800 at 6,210.400. Volume was 17% below average (neutral) and Bollinger Bands were 20% wider than normal.

Open High Low Close Volume___
6,225.7006,250.8006,204.3006,210.400 481,412,320

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 6,123.50 6,033.24 5,946.29
Volatility: 11 9 10
Volume: 653,440,896 578,527,360 550,465,600

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.


S&P/ASX 200 is currently 4.4% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of .AXJO at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .AXJO and have had this outlook for the last 2 periods.

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