Australia: S&P/ASX 200 (.AXJO) market clings on to being stronger in June

Australia: S&P/ASX 200 (.AXJO) market clings on to being stronger in June

Australia: S&P/ASX 200 (.AXJO) market clings on to being stronger in June

Australia has managed to cling to a gain in May, which puts it well ahead of most world share markets which showed hefty losses.

On the last trading day of the month the ASX 200 managed to add 4.8 points to 6396.9 points, which put it up around 1% for the month.

The strong post-election market bounce may have largely dissipated in the later stages of the week but Australia managed to resist the doom and gloom that hit most offshore markets hard.

Offshore markets slide

They were sent sliding by a renewed decline in US long term interest rates which scared off investors who believe a US yield curve inversion is a strong signal of a coming recession.

Markets also continued to be spooked by the US-China trade war, which has shown no sign of dissipating as President Trump decided to put a surprise tariff on Mexico.

During May the US market slumped by 5.5%, Japan was also down by 5.5% while Hong Kong (down 8%) and France (down 6.5%) were also disappointing.

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 6,264.75.

The projected upper bound is: 6,512.24.

The projected lower bound is: 6,290.05.

The projected closing price is: 6,401.14.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white candles.

A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.

A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend (which appears to be the case with S&P/ASX 200) it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend it is called a bullish hammer.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 20.3603. 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 52.86. 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 6 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 -23. This is not a topping or bottoming area. The last signal was a sell 5 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 sell 1 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 4.800 at 6,396.900. Volume was 18% above average (neutral) and Bollinger Bands were 39% wider than normal.

Open High Low Close Volume___
6,392.1006,398.8006,362.2006,396.900 742,869,760

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

Moving Averages: 10-period 50-period 200-period
Close: 6,460.04 6,299.79 6,042.96
Volatility: 13 11 14
Volume: 643,624,320 596,735,552 619,733,056

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 5.9% 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 31 periods.

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