Australia: S&P/ASX 200 (.AXJO) snaps record streak as China virus spooks Asian markets

Australia: S&P/ASX 200 (.AXJO) snaps record streak as China virus spooks Asian markets

Australia: S&P/ASX 200 (.AXJO) snaps record streak as China virus spooks Asian markets

A last-minute jump helped the local bourse keep losses in check on Tuesday, as the emergence of a deadly virus in China weighed on Asian markets and contributed to the snapping of its five-day winning streak.

The S&P/ASX 200 index declined 13 points, or 0.2 per cent, to close at 7066.30 points. Hong Kong’s market slid as much as 2.5 per cent and Shanghai’s 300 Index was down 1.7 per cent at the local close.

The local bourse is up 5.7 per cent for the month, with companies like Woolworths, Fortescue Metals, Magellan Financial Group and REA Group tapping record highs. Volatility indices were sitting at historic lows on Tuesday, suggesting there is limited concern about risks.

However, the emergence of the deadly coronavirus in China has started to spook some market analysts, particularly those with first-hand experience of the 2003 SARS outbreak that killed over 8000 people.

The consumer staples sector outperformed the rest of the ASX, with a gain of 1 per cent thanks to a 2 per cent rise in Woolworths to a record high closing price of $40.01. Coles Group gained 1.3 per cent to $16.13. The worst performing sector was information technology, down 1.3 per cent, but the most points were taken away by small declines in the financial and industrial sectors.

Shares in online electronics retailer Kogan dropped another 7.3 per cent to close at $5.73 after tumbling more than 22 per cent yesterday after it missed analyst expectations for first half performance. It’s the first time the stock has been below $6 since October, and the lowest price since late August.

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 6,819.12.

The projected upper bound is: 7,227.22.

The projected lower bound is: 6,918.97.

The projected closing price is: 7,073.09.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 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 88.0371. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 11 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 69.85. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 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 97. This is not a topping or bottoming area. The last signal was a sell 0 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 down -13.200 at 7,066.300. Volume was 17% below average (neutral) and Bollinger Bands were 91% wider than normal.

Open     High      Low     Close     Volume___
7,079.5007,079.5007,040.7007,066.300 480,903,552
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,973.32 6,805.17 6,619.70
Volatility: 8 15 14
Volume: 502,284,032 550,944,448 609,521,472

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 6.7% above its 200-period moving average and is in an upward trend. Volatility is low 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 8 periods.

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