Australia: S&P/ASX 200 (.AXJO) reporting season has seen companies becoming increasingly cautious

Australia: S&P/ASX 200 (.AXJO) reporting season has seen companies becoming increasingly cautious

Australia: S&P/ASX 200 (.AXJO) reporting season has seen companies becoming increasingly cautious

It is the busiest block of results with around 70 of the top 200 companies dropping mainly half-year numbers.

It also should give a clearer picture about how things are going across the key consumer, industrial and resources sectors.

“Reporting season is 37 per cent of the way through — by market capitalisation — and so far most of the results are in-line at the EPS [earnings per share] line, while the hits and misses were split equally,” Citi’s director of equity sales Karen Jorritsma said after the market closed on Friday.

Citi has not made wholesale changes to its earnings forecasts, with 70 per cent of the stocks it covers unchanged, although for the others needing adjustment, there have been twice as many downgrades as upgrades.

Despite pretty solid trading volumes over the week, and a strong lead from offshore where US shares were up 2.5 per cent, the ASX went nowhere much, except down a tad.

Wall Street’s strong Friday close looks set to give the local market a strong start to the week with ASX futures up almost 1 per cent over the weekend.

Overall, the bias in prices is: Upwards.

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

By the way, prices are vulnerable to a correction towards 5,913.01.

The projected upper bound is: 6,214.19.

The projected lower bound is: 5,929.80.

The projected closing price is: 6,072.00.

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 27 white candles and 23 black candles for a net of 4 white candles.

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 50.0709. This is not an overbought or oversold reading. 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 68.99. 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 2 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 59. 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 8 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 6.700 at 6,066.100. Volume was 8% above average (neutral) and Bollinger Bands were 3% wider than normal.

Open High Low Close Volume___
6,059.4006,076.1006,048.9006,066.100 662,251,072

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

Moving Averages: 10-period 50-period 200-period
Close: 6,041.62 5,778.92 6,008.52
Volatility: 13 16 14
Volume: 642,729,088 595,923,584 590,826,944

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 1.0% 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 28 periods.

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