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

Dragged lower by weakness in banking stocks, Australian shares recorded their first back to back decline in two weeks on Thursday.

The benchmark S&P/ASX 200 Index slid 26.1 points, or 0.4 per cent, to close at 6663.4, bucking the positive lead provided by Wall Street after the US Federal Reserve cut interest rates for the third time this year.

By sector, financials – the largest component on the broader index by market capitalisation – led the losses, falling 1.1 per cent.

ANZ Bank tumbled 3.3 per cent to $26.74 after announcing a decline in second half profits. It declared a final dividend of 80 cents per share, unchanged from a year earlier, although it delivered an unwelcome surprise to shareholders by reducing franking on dividend payments to 70 per cent.

The ANZ result reverberated around other banking stocks during the session. The Commonwealth Bank, Westpac and National Australia Bank (NAB) all skidded more than 1.1 per cent for the session.

Ahead of its half year results on Friday, Macquarie Bank closed at $133.92, near unchanged from where it finished on Wednesday.

Outside of financials, the energy sector was also under pressure, falling 0.8 per cent after US crude oil inventories rose sharply last week, according to data released by the US EIA.

Materials closed flat following the release of soft Chinese PMI data during the session.

Elsewhere, industrials, communications, consumer discretionary and REITs all fell between 0.1 to 0.6 per cent. Healthcare was steady.

Providing some offset, information technology finished with a gain of 1.1 per cent, making it the top performing sector for the session. Utilities also added 0.8 per cent, helped by a 1.4 per cent lift in AGL Energy shares which closed at $19.78. Consumer staples also bounced, lifting 0.6 per cent.

Thursday’s losses saw the benchmark index finish October with a fall of 0.4 per cent, trimming it year-to-date advance to 18 per cent.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 6,627.58.

The projected upper bound is: 6,798.85.

The projected lower bound is: 6,534.42.

The projected closing price is: 6,666.63.

Candlesticks

A black body occurred (because prices closed lower 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 33 white candles and 17 black candles for a net of 16 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 42.7713. 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 49.61. 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 83 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 -44. This is not a topping or bottoming area. The last signal was a sell 1 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 12 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -26.100 at 6,663.400. Volume was 0% below average (neutral) and Bollinger Bands were 12% narrower than normal.

Open     High      Low     Close     Volume___
6,689.5006,689.5006,639.8006,663.400 636,025,152
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,691.93 6,638.24 6,428.14
Volatility: 8 13 13
Volume: 576,363,456 647,016,128 639,549,056

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 3.7% 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 3 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.

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