Australia: S&P/ASX 200 (.AXJO) share market breached its record closing high

Australia: S&P/ASX 200 (.AXJO) share market breached its record closing high

Australia: S&P/ASX 200 (.AXJO) share market breached its record closing high

The Australian share market breached its record closing high, set before the global financial crisis (GFC) smashed stock values.

However, the ASX 200 was unable to sustain its new record for very long.

The benchmark index closed 0.5 per cent higher at 6,825.8 — just three points below its closing record of 6,828.7 points, set on November 1, 2007.

At its peak, on Monday afternoon, the ASX 200 climbed as high as 6,834 points.

It has taken 2,974 days for the benchmark ASX 200 index to get climb back to its pre-GFC levels.

In comparison, it took Wall Street’s S&P 500 less than half that time (1,386 days) to return to its October 2007 peak.

Furthermore, the S&P index — at 3,026 points — has nearly doubled its pre-GFC highs.

High dividend payouts, higher interest rates, and an obsession for houses are some of the reasons why it has taken the ASX so long to rebound to its pre-GFC levels.

Outperforming the region
The local share market outperformed its peers in the Asia-Pacific, particularly the Shanghai Composite (-0.1pc), Japan’s Nikkei (-0.2pc) and Hong Kong’s Hang Seng index (-1.4pc).

Asian investors are trading cautiously ahead of US-China trade talks this week in Shanghai, and further protests in Hong Kong, which have stretched into their eighth week.

The US Federal Reserve is also widely expected to cut America’s interest rates by 25 basis points by 4:00am (AEST) on Thursday.

Locally, every ASX sector is trading higher, led by technology (+1.8pc), telecommunications (+1.2pc) and industrials (+0.8pc).

But the benchmark index, which tracks Australia’s 200 largest publicly-listed companies, has not yet regained its intra-day record of 6,851.5 points — the highest level it touched (briefly) that same day.

Among the best performing stocks are Afterpay Touch (+4pc), telco Vocus Group (+3.8pc) and A2 Milk (+3.3pc).

On the flipside, the worst performers include debt collection company Credit Corp (-6.2pc), casino giant Crown Resorts (-3.2pc) and rare earths miner Lynas Corporation (-2.3pc).

Meanwhile, the broader All Ordinaries index ended its day at a fresh record, lifting 0.5 per cent to 6,911 points.

Last week, the All Ords also beat its previous record high from almost 12 years ago.

The Australian dollar was slightly weaker at 69.06 US cents.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 6,953.15.

The projected lower bound is: 6,716.87.

The projected closing price is: 6,835.01.

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 92.8107. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 15 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 67.28. 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 15 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 150.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 15 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 2 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 32.400 at 6,825.800. Volume was 14% below average (neutral) and Bollinger Bands were 10% narrower than normal.

Open     High      Low     Close     Volume___
6,793.4006,834.4006,793.4006,825.800 532,539,072
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,729.34 6,596.08 6,126.81
Volatility: 8 11 14
Volume: 576,813,056 640,766,464 625,804,288

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 11.4% 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 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 34 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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