Australia: S&P/ASX 200 (.AXJO) index could rise as much as 20% towards the 6,500 level

Australia: S&P/ASX 200 (.AXJO) index could rise as much as 20% towards the 6,500 level

Australia: S&P/ASX 200 (.AXJO) index could rise as much as 20% towards the 6,500 level

According to the AFR, a number of analysts are positive on the ASX 200 pushing notably higher in 2019.

Stephen Koukoulas from Market Economic has predicted that the benchmark index could rise as much as 20% towards the 6,500 level. This could be “aided by more accommodating monetary policy and a turn in the housing market.”

Elsewhere, Stephen Roberts from Laminar Capital is also bullish on the local market this year.

Mr Roberts has predicted a gain “somewhere between 8 to 12 per cent in 2019.” Although economic growth is moderating, he expects fading concerns about the future to help drive the share market higher.

Over at AMP Limited (ASX: AMP), its chief economist Shane Oliver is a little less bullish but remains positive on the share market’s prospects this year. He believes that the ASX 200 could reach the 6000-point mark again by December. This equates to a gain of just over 6% from its 2018 close price.

What now?

As you can see from the forecasts for 2018, predicting where the share market goes in 2019 is an impossible task.

I believe a lot will depend on the way that Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), and the rest of the big four perform. Due to their weighting in the index, if they return to form in 2019 then it could be a big lift for the market.

The good news is that I’m optimistic that their relatively cheap share prices and generous dividends means there’s a strong chance they will rebound in 2019, underpinning the rest of the market. But only time will tell if this is correct.

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 5,830.54.

The projected upper bound is: 6,026.55.

The projected lower bound is: 5,727.51.

The projected closing price is: 5,877.03.

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 26 white candles and 24 black candles for a net of 2 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 61.0083. This is not an overbought or oversold reading. The last signal was a sell 4 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 60.95. 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 buy 61 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 77. 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 -31.400 at 5,874.200. Volume was 17% above average (neutral) and Bollinger Bands were 17% wider than normal.

Open High Low Close Volume___
5,905.6005,907.6005,861.6005,874.200 705,592,256

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

Moving Averages: 10-period 50-period 200-period
Close: 5,861.79 5,702.39 6,005.03
Volatility: 8 17 14
Volume: 508,164,896 592,664,896 585,447,168

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 2.2% below 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 moderate flows of volume into .AXJO (mildly bullish). Our trend forecasting oscillators are currently bullish on .AXJO and have had this outlook for the last 15 periods.

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