Australia: S&P/ASX 200 (.AXJO) Expected to Open Lower

Australia: S&P/ASX 200 (.AXJO) Expected to Open Lower

Australia: S&P/ASX 200 (.AXJO) Expected to Open Lower

On Monday the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) started the week on a positive note and closed the day 0.3% higher at 6,185 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX futures pointing lower.

According to the latest SPI futures, the Australian share market is expected to open the day 5 points or 0.1% lower on Tuesday. This follows a tough night of trade on Wall Street which saw the the Dow Jones fall 0.35%, the S&P 500 drop 0.55%, and the Nasdaq tumble 1.4% lower. Trade war concerns weighed heavily on the market once again.

TPG Telecom results release.

This morning TPG Telecom Ltd (ASX: TPM) will release its full year results. According to a note out of Goldman Sachs, its analysts are expecting the company to report a 1% rise in revenue to $2,509 million and a 1% decline in EBITDA to $830.6 million for FY 2018. This compares to the company’s EBITDA guidance of $839 million. On the bottom line the broker has forecast flat net profit after tax of $416 million and earnings per share of 44.8 cents. All eyes will be on any further merger details, such as the expected synergies.

RBA minutes to be released.

The Reserve Bank of Australia will release the minutes from its September meeting this morning. While no bombshells are expected to be revealed, I’ll be looking to see if there are any hints that rates could go lower before going higher.

Aged care shares will be in focus.

The shares of aged care operators Estia Health Ltd (ASX: EHE), Japara Healthcare Ltd (ASX: JHC), and Regis Healthcare Ltd (ASX: REG) all fell heavily on Monday after Prime Minister Scott Morrison announced a royal commission into Australia’s aged care system. I’m interested to see whether bargain hunters swoop in today or the declines continue. I wouldn’t be surprised to see the latter happen.

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 6,163.30.

The projected upper bound is: 6,279.35.

The projected lower bound is: 6,086.61.

The projected closing price is: 6,182.98.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 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 62.2846. This is not an overbought or oversold reading. The last signal was a buy 4 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 43.77. 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 60 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 -45. This is not a topping or bottoming area. The last signal was a buy 3 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 8 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 19.700 at 6,185.000. Volume was 13% below average (neutral) and Bollinger Bands were 46% wider than normal.

Open High Low Close Volume___
6,165.3006,192.6006,142.3006,185.000 496,059,776

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 6,180.40 6,257.28 6,068.87
Volatility: 11 10 11
Volume: 548,922,048 559,510,592 562,553,728

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 1.9% above its 200-period moving average and is in an downward trend. Volatility is high 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 bearish on .AXJO and have had this outlook for the last 7 periods.

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