Australia: S&P/ASX 200 (.AXJO) reaches highest point ever despite Westpac scandal

Australia: S&P/ASX 200 (.AXJO) reaches highest point ever despite Westpac scandal

Australia: S&P/ASX 200 (.AXJO) reaches highest point ever despite Westpac scandal

The Australian share market has lifted to its highest ever point despite one of the country’s biggest institutions being embroiled in controversy.

Scandal-plagued Westpac is the nation’s second largest bank in a sector that dominates the equities market, but this hasn’t restricted the indices from reaching record highs in a year of overall positive gains.

The ASX top 200 companies pushed higher throughout the morning and reached its highest point in history at midday, up 0.4 per cent on Wednesday’s close to 6878.7 points at 1200, while the all ordinaries was at record high of its own, 0.40 per cent higher to 6978.7 points.

Today’s rise is credited to telco staple Telstra which jumped nearly 2.7 per cent as well as another jump from market darling CSL, with the biotechnology company lifting 1.2 per cent by midday.

Mining giant BHP was up 0.69 per cent to $38.615, Rio Tinto was up 0.62 per cent to $97.60 and Fortescue Metals was flat at $9.785.

The big four banks were mixed, with ANZ down 0.22 per cent to $25.005, Commonwealth Bank up 0.20 per cent to $81.85, NAB up 0.42 per cent to $26.29 and Westpac eked out a gain of 0.14 per cent to $24.845.

WESTPAC OFFERS INVESTORS WAY OUT

Westpac is allowing investors to withdraw from a $500 million share purchase plan it launched two weeks before a money laundering and child exploitation scandal hit the lender’s share price.

The bank said it had held meetings with corporate watchdog ASIC and was now providing a withdrawal option for shareholders who have applied for shares under a non-underwritten SPP launched on November 4 as part of a wider $2.5 billion capital raising.

Westpac said investors have until December 6 to request their withdrawal from the plan, with all other conditions and key dates remaining unchanged. Westpac lost as much as $8.06 billion from is market capitalisation after AUSTRAC announced last week it was taking the bank to court over an alleged 23 million breaches of money laundering laws.

The bank’s share price recovered somewhat after it announced on Tuesday its chief executive Brian Hartzer was stepping down and chairman Lindsay Maxsted would follow suit, but it dipped again on Wednesday.

The Australian Financial Review on Thursday reported ASIC was also broadening its investigation into the bank to include whether Westpac had met continuous disclosure obligations under the Corporations Act for its capital raising. Westpac shares were worth $24.81 before trade on Thursday 6.5 per cent below the $26.55 price before the AUSTRAC allegations were aired.

Under the SPP, investors could purchase shares at $25.32 or, if lower, the five-day volume weighted average price, less 2.0 per cent, up to and including the close of the plan on December 2.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 6,658.02.

The projected upper bound is: 7,006.54.

The projected lower bound is: 6,727.32.

The projected closing price is: 6,866.93.

Candlesticks

A white body occurred (because prices closed higher 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 32 white candles and 18 black candles for a net of 14 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 92.6959. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 6 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 62.63. 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 103 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 193.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 4 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 1 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 13.400 at 6,864.000. Volume was 21% below average (neutral) and Bollinger Bands were 22% narrower than normal.

Open     High      Low     Close     Volume___
6,850.6006,879.5006,850.6006,864.000 509,662,592
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,771.33 6,694.87 6,506.58
Volatility: 14 13 13
Volume: 616,622,272 599,405,760 638,132,032

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 5.5% above its 200-period moving average and is in an upward trend. Volatility is 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 23 periods.

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