Australia: S&P/ASX 200 (.AXJO) shares end modestly higher on RBA’s dovish tone

Australia: S&P/ASX 200 (.AXJO) shares end modestly higher on RBA’s dovish tone

Australia: S&P/ASX 200 (.AXJO) shares end modestly higher on RBA’s dovish tone

Australian shares closed modestly higher on Tuesday, after minutes from the country’s central bank meeting this month revealed a clear dovish bias, but gains on the benchmark were capped by a decline in technology stocks.

The S&P/ASX 200 index advanced 0.7% to 6,814.20 at the close of trade. The main index closed 0.4% lower on Monday.

The Reserve Bank of Australia kept rates steady at its monetary policy meeting on Nov. 5, but the minutes released on Tuesday showed it came nearer to a cut than first thought. The bank left the door wide open to a further move if needed.

That was a surprise to many in the markets, which had priced in only a minor chance of a November easing. Analysts said the minutes suggested a further rate cut, likely in February but potentially as early as December.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 6,647.77.

The projected upper bound is: 6,946.13.

The projected lower bound is: 6,690.27.

The projected closing price is: 6,818.20.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 33 white candles and 17 black candles for a net of 16 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 89.2836. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 4 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 61.42. 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 96 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 140.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 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 6 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 47.400 at 6,814.200. Volume was 12% below average (neutral) and Bollinger Bands were 40% narrower than normal.

Open     High      Low     Close     Volume___
6,766.8006,814.2006,755.0006,814.200 562,168,384
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,744.46 6,682.70 6,482.35
Volatility: 12 12 13
Volume: 593,434,496 614,962,432 637,540,352

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 5.1% 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 16 periods.

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