Australia: S&P/ASX 200 (.AXJO) set to open lower

Australia: S&P/ASX 200 (.AXJO) set to open lower

Australia: S&P/ASX 200 (.AXJO) set to open lower

Australian shares are set to edge down to start the trading week, with a lack of direction from overseas as if global investors paused to catch their breath.

A dearth of key data in the next few days could give bears a chance to recoup some of last week’s losses.

ASX futures were 7 points or 0.1% lower at 6631. The currency, in contract, advanced 0.5% to US68.46¢.

Shares on Wall Street were mixed on Friday in New York in the wake of the August jobs report which missed expectations. In addition, Larry Kudlow, an economic adviser to President Donald Trump, sought to downplay expectations for a resolution of the US-China trade dispute.

The end result is a lack of positive catalysts at the start of this week, which is poised to be a milder one for both domestic and overseas economic data. The highlight may prove to be Thursday’s policy meeting at the European Central Bank.

“An aggressive easing package is expected,” NAB’s Tapas Strickland wrote in a week-ahead note. “The consensus expects the deposit rate to be cut by 10bp to 0.5% (we expect a larger 20bp cut to -0.6%), tiering of the deposit rate, and a resumption of QE at €30bn a month.

Technical Analysis

Overall, the bias in prices is: Upwards.

The projected upper bound is: 6,812.24.

The projected lower bound is: 6,483.50.

The projected closing price is: 6,647.87.

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 29 white candles and 21 black candles for a net of 8 white candles.

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 80.9909. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 57.03. 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 44 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 159.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. 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 7 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 34.100 at 6,647.300. Volume was 9% above average (neutral) and Bollinger Bands were 14% narrower than normal.

Open     High      Low     Close     Volume___
6,613.2006,656.1006,613.2006,647.300 702,568,128
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,548.98 6,628.54 6,234.49
Volatility: 14 16 14
Volume: 715,832,064 641,132,800 635,283,968

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 6.6% 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 0 periods.

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