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

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

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

On Wednesday the S&P/ASX 200 index came under pressure and tumbled lower due to a combination of trade war and impeachment concerns. The index finished the day 0.6% lower at 6,710.2 points.

Will the local share market be able to bounce back from this on Thursday? Here are five things to watch:

ASX 200 expected to rise.   

The Australian share market looks set to rebound slightly on Thursday after a positive night of trade in the United States. According to the latest SPI futures, the ASX 200 index is expected to open the day 12 points or 0.2% higher this morning. On Wall Street the Dow Jones rose 0.6%, the S&P 500 climbed 0.6%, and the Nasdaq index pushed 1.05% higher.

Tech shares could rebound.

A number of tech shares such as Altium Limited (ASX: ALU) and Nearmap Ltd (ASX: NEA) dropped lower yesterday but look set to rebound today after their U.S. counterparts were strong performers on Wall Street. The technology-focused Nasdaq index surged 1.05% higher after President Trump said a trade deal could come soon.

Oil prices slide again.

Energy shares including Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could continue to edge lower after oil prices continued their slide. According to Bloomberg, the WTI crude oil price dropped 14% to US$56.50 a barrel and the Brent crude oil price fell 1.15% to US$62.38 a barrel after a surprise build-up of U.S. crude.

Gold price tumbles.

Gold miners including Northern Star Resources Ltd (ASX: NST) and Saracen Mineral Holdings Limited (ASX: SAR) could come under pressure today after the gold price dropped notably lower. According to CNBC, the spot gold price dropped 1.9% to US$1,511.0 an ounce.

Dividends being paid.

A number of Australia’s biggest companies are due to pay their dividends later today. This includes banking giant Commonwealth Bank of Australia (ASX: CBA), energy producer Santos, and telco company Telstra Corporation Ltd (ASX: TLS).

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 6,610.66.

The projected upper bound is: 6,870.34.

The projected lower bound is: 6,551.53.

The projected closing price is: 6,710.94.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
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 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 63.3882. This is not an overbought or oversold reading. The last signal was a sell 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 58.54. 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 57 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 62. 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 20 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -38.700 at 6,710.200. Volume was 3% below average (neutral) and Bollinger Bands were 21% narrower than normal.

Open     High      Low     Close     Volume___
6,748.9006,748.9006,696.3006,710.200 650,518,848
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,703.16 6,629.90 6,298.69
Volatility: 6 15 13
Volume: 759,255,552 688,532,096 639,672,064

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 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 very strong flows of volume into .AXJO (bullish). Our trend forecasting oscillators are currently bullish on .AXJO and have had this outlook for the last 13 periods.

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