Australia: S&P/ASX 200 (.AXJO) smashes new records

Australia: S&P/ASX 200 (.AXJO) smashes new records

Australia: S&P/ASX 200 (.AXJO) smashes new records

Australia’s stock market chalked up a surprisingly strong session on Wednesday with more than a tenth of the S&P/ASX200 reaching record high prices. The index closed nearly 1 per cent higher at 7132.7 points. News that German retail giant Kaufland is pulling out of Australia before it even opened stores helped drive Woolworths and Coles shares up more than 3 per cent to all-time highs of $41.32 and $16.62 respectively.

As markets in Australia and the US reach new highs, volatility indices remain at unusually low levels, demonstrating complacency about potential risks to stock prices. The VIX index was sitting at 12.8 on Wednesday, well below long-term averages.

The consumer staples sector outperformed with a 2.9 per cent rise, followed by a 1.6 per cent gain in information technology and a 1.4 per cent rise in healthcare.

The worst performance was a gain of 0.01 per cent in utilities, which was weighed down by a 0.9 per cent fall in AGL Energy.

Technical Indicators

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 6,837.71.

The projected upper bound is: 7,296.95.

The projected lower bound is: 6,984.79.

The projected closing price is: 7,140.87.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 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 89.0871. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 12 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 73.63. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 1 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 112.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 1 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 9 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 66.400 at 7,132.700. Volume was 4% above average (neutral) and Bollinger Bands were 106% wider than normal.

Open     High      Low     Close     Volume___
7,066.3007,144.9007,062.2007,132.700 601,969,472
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 7,004.83 6,813.35 6,624.25
Volatility: 8 15 14
Volume: 505,415,008 549,648,128 610,019,456

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 7.7% 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 9 periods. Our momentum oscillator is currently indicating that .AXJO is currently in an overbought condition.

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