Australia: S&P/ASX 200 (.AXJO) opened at its lowest level this year

Australia:  S&P/ASX 200 (.AXJO) opened at its lowest level this year

Australia: S&P/ASX 200 (.AXJO) opened at its lowest level this year

The Australian sharemarket opened at its lowest level this year, with tens of billions of dollars wiped from the value of local companies.

After the first 50 minutes of trade the domestic benchmark S&P-ASX 200 was down 2.1 per cent.

The deepening rout in global stocks saw the index slump further to a 2.25 per cent loss mid-session, with healthcare and consumer stocks leading the heavy-volume sell-off to a one-year low.

The ASX has now fallen 10.4 per cent since peaking at a 10-year high on August 30.

There were 2 per cent losses for financials, miners, energy, healthcare, infotech and telcos as red reigned during morning trade.

The dive continues the ASX’s worst month in more than three years, the market now down more than 8 per cent for October, edging ever closer to an 18-month low of February 2016 in its fifth straight session of losses.

Energy stocks are enduring their worst month since September 2015 and lost another 2.37 per cent early on flat oil prices.

Resources fell further, with giants BHP and Rio Tinto shedding 2.99 and 2.97 per cent respectively, and Fortescue Metals losing 4.4 per cent after reporting a fall in first-quarter iron ore shipments.

Only a few of the gold miners, buoyed by an uptick in gold prices, saw a bit of green early on.

The big four banks are down between 1.76 and 2.03 per cent each — the losses led by NAB — while Macquarie Group is down 3.03 per cent.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 6,053.13.

The projected upper bound is: 5,787.73.

The projected lower bound is: 5,513.90.

The projected closing price is: 5,650.82.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 1.9147. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 2 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 21.30. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 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 -181.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 6 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 13 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -164.900 at 5,664.100. Volume was 49% above average (neutral) and Bollinger Bands were 166% wider than normal.

Open High Low Close Volume___
5,829.0005,829.0005,664.1005,664.100 854,553,984

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 5,866.48 6,133.08 6,069.06
Volatility: 20 15 12
Volume: 627,273,984 616,531,968 576,427,072

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 6.7% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of .AXJO (mildly bearish). Our trend forecasting oscillators are currently bearish on .AXJO and have had this outlook for the last 35 periods. Our momentum oscillator is currently indicating that .AXJO is currently in an oversold condition.

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