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Australia: S&P/ASX 200 (.AXJO) has reached 12-year highs

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Australia: S&P/ASX 200 (.AXJO) has reached 12-year highs

The ASX 200 is not doing badly out of a period of trade-related risk appetite which has hit other markets. The Sydney equity benchmark reached highs not seen since late 2007 last week as a range of fundamental factors combined to lift it.

Rising iron ore prices played their part, with Australia’s primary commodity export bolstered by news of inventory drawdowns at Chinese ports. A weaker local currency also seems to have boosted the attraction of Australian stocks to international investors, with growing suspicions that record-low interest rates could soon go lower helping too.

Technically speaking the ASX has regained the impressive daily-chart uptrend channel which held from early February and which is in any case only an extension of the long rise up from the lows of late November. Mid-May’s break below the channel bottom now looks entirely spurious.

Still, it’s worth pointing out that the channel top has not faced a stern upside test for quite some time, since early March in fact. Moreover, it looks as though an ‘evening star’ formation can be seen there much more recently, between March 21 and 23.

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 6,255.23.

The projected upper bound is: 6,597.87.

The projected lower bound is: 6,383.94.

The projected closing price is: 6,490.90.

Candlesticks

A white body occurred (because prices closed higher 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 31 white candles and 19 black candles for a net of 12 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 52.1858. 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 64.79. 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 3 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 69. This is not a topping or bottoming area. The last signal was a sell 2 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 6 period(s) ago.

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 52.1858. 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 64.79. 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 3 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 69. This is not a topping or bottoming area. The last signal was a sell 2 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 6 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 32.900 at 6,484.800. Volume was 30% above average (neutral) and Bollinger Bands were 36% wider than normal.

Open High Low Close Volume___
6,451.9006,491.7006,451.9006,484.800 811,671,552

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

Moving Averages: 10-period 50-period 200-period
Close: 6,434.87 6,286.22 6,041.22
Volatility: 12 11 14
Volume: 621,735,936 602,168,704 617,578,880

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 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 bullish on .AXJO and have had this outlook for the last 28 periods.

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