Australia: S&P/ASX 200 (.AXJO) nears 7000
The local sharemarket pushed to fresh record highs on Wednesday, brushing aside a soft lead from Wall Street sparked by renewed concerns towards progress in trade negotiations between the US and China in the months ahead.
The benchmark S&P/ASX 200 climbed 32.6 points, or 0.5 per cent, to close at 6994.8, extending its rally so far in 2020 to 4.7 per cent. At one point during the session, the index moved to within a whisker of surpassing the 7000-point level before retreating in late trade.
“As the index approaches this level, it will likely see some investors review their portfolios, causing them to become more active when it comes to investing,” said Anthony Doyle, global cross-asset investment specialist at Fidelity International. “In reality, there isn’t much difference between the S&P/ASX 200 at 6995 and 7005, but 7000 could represent an emotional trigger point to some investors.”
Despite the reluctance to push the index through this level, it was still a resilient performance from the local market with investors unperturbed by reports that US tariffs on Chinese imports are unlikely to be rolled back before the US presidential election, something that weighed on sentiment on Wall Street and regional Asian markets on Wednesday.
With the exception of consumer staples, which were weighed down by weakness in supermarket operators, every sector finished higher. The gains were led by industrials which rallied 0.9 per cent. Increases of between 0.4 per cent to 0.7 per cent were booked across all remaining sectors.
By individual stock, gold producers were in demand as bullion prices steadied after several days of heavy losses. St Barbara led the gains on the benchmark, soaring 8.1 per cent to $2.93. Evolution Mining also rallied 5.8 per cent to $3.85.
Shares in rural conglomerate Elders, one of the top performers on Tuesday, continued to climb, lifting by a further 5.7 per cent to $7.18. Agricultural chemicals firm Nufarm, another company closely tied to the performance of the rural sector, also enjoyed a strong session with a gain of 4.2 per cent to $6.20.
At the other end of the score board, lithium miners were hit hard with Pilbara Minerals sliding 7.7 per cent to $0.36. Orocobre also fell by 5.5 per cent to $3.58, in part due to a ratings downgrade by JP Morgan. In contrast to gold stocks over the past week, shares in battery materials suppliers had been running hot prior to Wednesday’s session.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 6,748.51.
The projected upper bound is: 7,157.33.
The projected lower bound is: 6,845.30.
The projected closing price is: 7,001.31.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 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 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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 94.5585. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 7 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 66.89. 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 134 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 151.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 6 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 4 period(s) ago.
Rex Takasugi – TD Profile
S&P/ASX 200 closed up 32.600 at 6,994.800. Volume was 3% below average (neutral) and Bollinger Bands were 25% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 6,846.77 6,775.56 6,603.15
Volatility: 10 15 14
Volume: 465,722,304 556,924,032 611,775,552
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.
S&P/ASX 200 is currently 5.9% above its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 4 periods.
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