Australia: S&P/ASX 200 (.AXJO) expected to rebound

Australia: S&P/ASX 200 (.AXJO) expected to rebound

Australia: S&P/ASX 200 (.AXJO) expected to rebound

After a couple of very disappointing days of trade, the S&P/ASX 200 index looks set to return to form on Thursday. According to the latest SPI futures, the ASX 200 index is expected to jump 59 points or 0.9% at the open. This follows a positive night on Wall Street which in late trade sees the Dow Jones up 0.8%, the S&P 500 up 0.8%, and the Nasdaq up 0.7%.

Metcash results

The Metcash Limited (ASX: MTS) share price will be one to watch on Thursday when it releases its half year results. According to a note out of Goldman Sachs, it is expecting Metcash to report a 0.3% increase in sales to $6.3 billion and a 1% lift in EBIT (before one-offs) to $144.4 million. The Food pillar is expected to be the main driver of growth during the half.

Oil prices surge higher

It looks set to be a good day for energy producers such as Oil Search Limited (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) after oil prices surged higher. According to Bloomberg, the WTI crude oil price is up 4.3% to US$58.53 a barrel and the Brent crude oil price has jumped 3.9% to US$63.17 a barrel. A sharper than expected decline in U.S. inventories sent oil prices charging higher.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 6,909.82.

The projected lower bound is: 6,599.89.

The projected closing price is: 6,754.85.

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 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 70.8905. This is not an overbought or oversold reading. The last signal was a buy 3 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 51.68. 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 112 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 -19. 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 5 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 45.700 at 6,752.600. Volume was 0% above average (neutral) and Bollinger Bands were 7% narrower than normal.

Open     High      Low     Close     Volume___
6,706.9006,752.6006,706.9006,752.600 638,297,280
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,747.06 6,698.91 6,533.44
Volatility: 19 15 13
Volume: 569,496,512 582,156,992 631,282,816

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 3.4% 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 5 periods.

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