Australia: S&P/ASX 200 (.AXJO) closes at fresh high as US shares resume record run

Australia: S&P/ASX 200 (.AXJO) closes at fresh high as US shares resume record run

Australia: S&P/ASX 200 (.AXJO) closes at fresh high as US shares resume record run

The ASX 200 closed 0.9 per cent higher at 6,962 points — beating its previous record finish posted on Friday, with broad-based gains across most sectors.

Mining stocks rallied into the close, including Rio Tinto (+1.9pc), Fortescue Metals (+1.9pc) and South32 (+3.6pc).

However, shares in retailer Mosaic Brands — which includes clothing chains Rivers, Noni B, Katies and Millers — plunged (-17pc) after it revealed the bushfires have hit its sales.

The improved investor sentiment comes ahead of the expected signing of the first phase of a long awaited trade deal between Washington and Beijing on Wednesday by US President Donald Trump and Chinese Vice-Premier Liu He.

The news the US would remove China from its list of currency manipulators comes after the Treasury Department formally labelled it as such in August last year, accusing it of lowering its currency to get a trade advantage.

The designation further escalated the trade dispute, after China’s central bank allowed the Chinese currency, the yuan, to fall in response to new US tariffs.

Bloomberg reported that the currency manipulator designation prompted Beijing to increase transparency around the pricing of the yuan.

However, the International Monetary Fund said in September that the yuan was fairly valued and there was no evidence of manipulation.

In other US news, the nation’s federal budget deficit rose above $US1 trillion last year for the first time since 2012, according to the Treasury Department.

The budget shortfall reached $US1.02 trillion for 2019, up by 17.1 per cent from 2018 despite a rise in revenue from company tax.

Rising corporate tax revenue helped lower the pace of increase in the spending gap.

US national debt now stands at $US23.2 trillion, despite Mr Trump’s vows to cut debt.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 6,732.00.

The projected upper bound is: 7,123.79.

The projected lower bound is: 6,812.56.

The projected closing price is: 6,968.18.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 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 94.8974. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 6 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 64.84. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 133 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 158.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 5 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 up 58.500 at 6,962.200. Volume was 7% below average (neutral) and Bollinger Bands were 13% wider than normal.

Open     High      Low     Close     Volume___
6,903.7006,962.8006,903.7006,962.200 549,744,064
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,815.70 6,769.04 6,599.26
Volatility: 16 15 14
Volume: 439,805,952 556,562,624 611,818,560

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 5.5% above its 200-period moving average and is in an upward trend. Volatility is low 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 3 periods.

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