Australia: S&P/ASX 200 (.AXJO) a flat start to the week is expected

Australia: S&P/ASX 200 (.AXJO) a flat start to the week is expected

Australia: S&P/ASX 200 (.AXJO) a flat start to the week is expected

The Australian market is expected to start the week flat as investors wait to see earnings results for a swathe of firms.

The benchmark S&P/ASX200 index on Friday closed down 0.3 per cent at 6,071.5 points while the broader All Ordinaries eased 0.4 per cent.

“It looks like we’ll be pretty flat,” AMP Capital’s chief economist Shane Oliver told AAP on Sunday.

“I suspect we’ll open a little soft but may be down five points or something like that.”

In the US, positive corporate results on Friday offset lingering scepticism over the China trade deal being solved before a March 1 deadline as the benchmark S&P 500 index and the Nasdaq both enjoyed gains of about 0.1 per cent.

Yet, the Dow Jones shed 0.25 per cent.

Locally, corporate reporting season reaches top gear with Amcor, Bendigo Bank, JB Hi-Fi and real estate investors GPT are all due to release earnings results on Monday.

Telstra, Transurban, CSL, Woodside, AMP and Cochlear are among the major companies expected to follow later in the week.

Dr Oliver said he expected results will be mixed but forecast retailers, in particular, will show signs of recent struggles while building materials figures will point to the early stages of a construction slowdown.

“The earnings expectations for this financial year have fallen quite substantially to about four per cent growth, and excluding the resources, it’s just two per cent growth,” he said.

“There have been quite a few profit warnings (but) they’ll probably show growth on average.”

Dr Oliver said recent adverse news, such as the Reserve Bank downgrading its key economic forecasts, may weigh on ANZ’s weekly consumer confidence index, out Tuesday.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 5,868.92.

The projected upper bound is: 6,234.56.

The projected lower bound is: 5,924.43.

The projected closing price is: 6,079.50.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 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 90.9271. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 12 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 72.12. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 69 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 154.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.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 3 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -21.000 at 6,071.500. Volume was 1% above average (neutral) and Bollinger Bands were 1% narrower than normal.

Open High Low Close Volume___
6,092.5006,094.7006,054.1006,071.500 616,478,208

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

Moving Averages: 10-period 50-period 200-period
Close: 5,948.12 5,745.34 6,007.92
Volatility: 14 17 14
Volume: 689,839,808 607,613,952 590,159,424

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.

Summary

S&P/ASX 200 is currently 1.1% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 23 periods. Our momentum oscillator is currently indicating that .AXJO is currently in an overbought condition.

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