Australia: S&P/ASX 200 (.AXJO) Drops With Traders Cautious on Virus Woes

Australia: S&P/ASX 200 (.AXJO) Drops With Traders Cautious on Virus Woes

Australia: S&P/ASX 200 (.AXJO) Drops With Traders Cautious on Virus Woes

The caution that’s gripped financial markets lately showed no signs of letting up as trading got underway this week, with concern that the coronavirus will hamper growth prospects hitting the Australian and New Zealand dollars. The yen gained.

Australian bonds climbed, while equity futures indicated a soft start across the Asia-Pacific following Friday’s 1.1% slide on the S&P 500 Index. Over the weekend, finance chiefs and central bankers from the world’s largest economies said they see downside risks to the global economy persisting as supply chains get disrupted from the deadly virus. Japan is shut for a holiday and Treasuries won’t trade until the London open.

Treasury yields last week reached fresh lows and global equities declined as investors took a defensive stance with new virus cases outside China lifting anxiety levels. South Korea has seen a 20-fold increase in cases in five days and Italy canceled some public events after coronavirus infections rose to 140.

“While the coronavirus is probably slowing in China, it is speeding up elsewhere,” said Charles Gillams, managing director at RJMG Asset Management Ltd. “Its impact on Chinese business is already deep. So, whether that has a one economic quarter impact — of some severity — or is a bigger issue remains unclear and indeed we won’t know for while.”

Meantime, investors will also be scrutinizing new pledges of support in China amid signs some workers are returning to work. President Xi Jinping said authorities will step up policy adjustments to achieve the nation’s economic and social goals while fighting the virus outbreak.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 6,949.66.

The projected upper bound is: 7,278.66.

The projected lower bound is: 7,015.70.

The projected closing price is: 7,147.18.

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 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 63.7799. This is not an overbought or oversold reading. The last signal was a sell 1 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 62.36. 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 20 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 83. This is not a topping or bottoming area. The last signal was a sell 0 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 6 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -23.500 at 7,139.000. Volume was 83% above average (neutral) and Bollinger Bands were 4% narrower than normal.

Open     High      Low     Close     Volume___
7,162.5007,162.6007,135.7007,139.0001,072,739,392
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 7,107.43 6,941.44 6,704.29
Volatility: 6 12 14
Volume: 723,142,400 577,417,280 623,331,968

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 6.5% 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 30 periods.

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