Australia: S&P/ASX 200 (.AXJO) looks set to be an eventful week

Australia: S&P/ASX 200 (.AXJO) looks set to be an eventful week

Australia: S&P/ASX 200 (.AXJO) looks set to be an eventful week

Monday.

On Monday Nufarm Limited (ASX: NUF) shares will be on watch when it releases its full year results. A weak result is expected from the agricultural chemicals company, so all eyes will be on its guidance for FY 2020. The market is currently expecting a 19% rebound in EBITDA next year. Investors will also be looking out for an update on its key Omega-3 commercialisation. Further, on Monday a number of blue chip shares will be paying their shareholders their latest dividends. These include Bendigo and Adelaide Bank Ltd (ASX: BEN) and Insurance Australia Group Ltd (ASX: IAG).

Tuesday.

On Tuesday the Reserve Bank of Australia will take centre stage when it holds its meeting. According to the most recent cash rate futures, the market has priced in a 78% probability of the central bank taking rates down to a new record low of 0.75%. In addition to this, Tuesday marks the end of proceedings in the Federal Court in respect to the TPG Telecom Ltd (ASX: TPM)-Vodafone merger. However, a decision is not expected to be announced for a few months. And finally, watch out for September’s CoreLogic home value index.

Wednesday.

Today the shareholders of iron ore producer Fortescue Metals Group Limited (ASX: FMG) will be paid another dividend. The miner is scheduled to pay shareholders a 24 cents per share fully franked dividend. Estia Health Ltd (ASX: EHE) and Iluka Resources Limited (ASX: ILU) are also due to pay their latest dividends on Wednesday.

Thursday.

On Thursday the ABS will release Australia’s trade balance for the month of August. Australia’s surplus hit a new high of $8 billion in June and then remained elevated at $7.3 billion in July thanks to soaring commodity prices. Things are expected to normalise a touch in August, with the market expecting a surplus of around $5.6 billion due to softening commodity prices.

Friday.

Finally, on Friday retail shares such as JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN) will be on watch when the ABS releases August’s retail sales data. In July retail sales fell 0.1% month on month and rose 2.4% year on year. This was short of expectations and appeared to show little positive impact from rate and tax cuts. The market will no doubt be hoping for better in August.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 6,612.51.

The projected upper bound is: 6,875.46.

The projected lower bound is: 6,557.37.

The projected closing price is: 6,716.42.

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 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 28.8475. This is not an overbought or oversold reading. The last signal was a sell 5 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 58.10. 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 59 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 27. 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 22 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 38.500 at 6,716.100. Volume was 10% below average (neutral) and Bollinger Bands were 31% narrower than normal.

Open     High      Low     Close     Volume___
6,677.6006,721.2006,677.6006,716.100 606,268,864
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,710.12 6,630.79 6,310.01
Volatility: 7 15 13
Volume: 745,711,936 692,103,424 638,992,832

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 6.4% 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 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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