Australia: S&P/ASX 200 (.AXJO) continues to push the market higher

Australia: S&P/ASX 200 (.AXJO) continues to push the market higher

Australia: S&P/ASX 200 (.AXJO) continues to push the market higher

Onwards and upwards we go. The positive momentum continues to push the market higher. The Royal Commission didn’t expose anything new and the Financial sector is recovering with further consolidation above the 60 day and 200 day moving averages which is very positive for this sector and is helping move our overall market higher. In the short term our market looks like it is heading for the 6400 level and perhaps beyond. This will largely depend on the impetus behind the Financial sector.

For now, investors are still thinking the Banks are good value. This could last a little longer with a further 2% to 5% upside likely. The daily chart on the ASX 200 is seeing some decent separation from the 60 day and 200 day moving averages which historically suggests a correction sometime soon.

The daily chart is also hugging the secondary uptrend line and for the uptrend to remain intact for any length of time we would need to see some acceleration in the upward movement. The weekly RSI is still bearish however, this indicator can be wrong, and a time lag is often a common occurrence which means the recent run up on the ASX 200 could have some life left in it yet.

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 6,151.43.

The projected upper bound is: 6,444.90.

The projected lower bound is: 6,257.09.

The projected closing price is: 6,351.00.

Candlesticks

A white body occurred (because prices closed higher 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 25 white candles and 25 black 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 91.9529. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 13 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 62.64. 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 40 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 166.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 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 buy 3 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 5.800 at 6,345.000. Volume was 13% above average (neutral) and Bollinger Bands were 40% narrower than normal.

Open High Low Close Volume___
6,338.4006,358.0006,338.4006,345.000 629,004,160

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

Moving Averages: 10-period 50-period 200-period
Close: 6,299.18 6,229.87 6,043.24
Volatility: 7 10 11
Volume: 563,616,768 551,407,808 552,543,552

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 5.0% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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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