Australia: S&P/ASX 200 (.AXJO) gains are thanks solely to the financial sector

Australia: S&P/ASX 200 (.AXJO) gains are thanks solely to the financial sector

Australia: S&P/ASX 200 (.AXJO) gains are thanks solely to the financial sector

The S&P/ASX 200 has closed 1.7 per cent higher at 6476, the highest since 14 December, 2007. The gains are thanks solely to the financial sector, which had multiple negative overhangs removed with the Coalition’s victory on Saturday.

Financial stocks gained 5.6 per cent and added 113 points to the market, which made an overall gain of 110 points. Stocks with surprisingly large gains include NIB Holdings, up 15.8 per cent to $6.82, and Medibank Private is up 11.5 per cent to $3.21.

Among the banks Westpac closed 9.2 per cent higher at $27.75, NAB closed 7.9 per cent higher at $25.81, ANZ Bank closed 7.8 per cent higher at $27.86 and Commonwealth Bank, the single largest stock on the ASX, closed 6.3 per cent higher at $77.40. Commonwealth and Westpac together contributed 60 points to the index today. Without the finance sector the market would have been down.

The biggest decline was Webjet falling 7.7 per cent to $15.50, nearmap closed 5.7 per cent lower at $3.61, and Altium closed 4.6 per cent lower at $31.10.

Point were taken off by BHP falling 0.6 per cent to $38.21 and Sydney Airport dropping 4 per cent to $7.51.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 6,589.70.

The projected lower bound is: 6,371.72.

The projected closing price is: 6,480.71.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
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.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 94.4341. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 14 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 68.46. 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 15 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 214.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. 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 buy 0 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 110.800 at 6,476.100. Volume was 7% above average (neutral) and Bollinger Bands were 20% narrower than normal.

Open High Low Close Volume___
6,365.3006,476.1006,365.3006,476.100 659,700,800

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 6,316.19 6,251.59 6,034.77
Volatility: 13 11 14
Volume: 578,536,704 602,661,056 613,578,176

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 7.3% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 22 periods.

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