Australia: S&P/ASX 200 (.AXJO) are poised to open higher

Australia: S&P/ASX 200 (.AXJO) are poised to open higher

Australia: S&P/ASX 200 (.AXJO) are poised to open higher

Australian shares are poised to open higher, following a stunning rally on Friday in New York which caused all three big US benchmarks surge more than 9 per cent.

ASX futures were up 61 points or 1.1 per cent to 5655. The local currency pared a plunge to as low as US61.24¢ to end down 0.5 per cent at US62.03¢.

The New York rebound came after President Donald Trump unleashed $US50 billion in funds to offset the impact of the coronavirus, principally to spur the nation’s ability to test for it.

Investors will be waiting for news of further coordinated fiscal and monetary efforts to bolster economic growth, including from Canberra. In addition, G7 leaders are scheduled to hold a conference call early this week.

Strategists were wary of calling a floor on the global sell-off just that.

Today’s agenda

No local data

Overseas data: China industrial production February; Japan machinery orders January; UK Rightmove house prices March; US NY Empire manufacturing March; G7 leaders conference call

Technical Indicators

Overall, the bias in prices is: Downwards.

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

By the way, prices are vulnerable to a correction towards 6,496.56.

The projected upper bound is: 5,876.88.

The projected lower bound is: 5,155.67.

The projected closing price is: 5,516.27.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 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 25.8372. This is not an overbought or oversold reading. The last signal was a buy 3 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 26.64. This is where it usually bottoms. 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 sell 35 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 -151.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 6 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 sell 14 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 234.700 at 5,539.300. Volume was 220% above average (trending) and Bollinger Bands were 431% wider than normal.

Open     High      Low     Close     Volume___
5,304.6005,539.3004,873.7005,539.3002,260,699,648
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 6,003.45 6,781.45 6,692.15
Volatility: 74 38 23
Volume: 1,422,382,720 812,702,848 674,364,480

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 17.2% below its 200-period moving average and is in an downward 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 moderate flows of volume out of .AXJO (mildly bearish). Our trend forecasting oscillators are currently bearish on .AXJO and have had this outlook for the last 12 periods. Our momentum oscillator is currently indicating that .AXJO is currently in an oversold condition.

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