Australia: S&P/ASX 200 (.AXJO) staging a stunning turnaround in the last hour of trade

Australia: S&P/ASX 200 (.AXJO) staging a stunning turnaround in the last hour of trade

Australia: S&P/ASX 200 (.AXJO) staging a stunning turnaround in the last hour of trade 

The ASX 200 index finished the session up 3 points, staging a stunning turnaround in the last hour of trade as banks & miners recovered earlier losses.

Australian shares rallied late on Thursday to close the session higher as mild losses by the banks were offset by a rebounding energy sector.

The S&P/ASX 200 Index advanced 3.2 points, or 0.1 per cent, to 5736 after a mixed day of trading which saw the index trade with some volatility.

“We have breached a few key technical levels which has opened the index up for further downside and called into question investor confidence,” said Saxo Capital Markets market strategist Eleanor Creagh. “The market will remain choppy, with optimism subdued, until we have some clarity on the outcome of President Xi and President Trumps meeting on the sidelines of the G20 summit.”

The major banks were the biggest weights on the index for most of the day although the market rally saw them close only mildly lower. Commonwealth Bank led the fall, closing 0.5 per cent lower at $68.86, Westpac fell 0.4 per cent to $25.34, NAB slid 0.2 per cent to $23.88 and ANZ closed flat at $25.39.

The major material stocks also weighed the market on Thursday. BHP Billiton fell 0.2 per cent to $32.04, Rio Tinto closed 0.8 per cent lower at $77.84 and South32 slid 0.6 per cent to $3.33.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 5,879.90.

The projected lower bound is: 5,575.12.

The projected closing price is: 5,727.51.

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 26 white candles and 24 black candles for a net of 2 white candles.

A bullish harami occurred (where the current small white body is contained within an unusually large black body). During a downtrend (which appears to be the case with S&P/ASX 200) this pattern implies an end to the decline as the bears appear to have exhausted themselves.

During an uptrend the bullish harami pattern is bearish as the bears appear to be gaining strength as the bulls weaken.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

An on-neck line occurred. This is a bearish pattern where prices should move lower when the white candlestick’s (i.e., the most recent) low is penetrated.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 10.8201. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 36.07. 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 buy 12 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 -132.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -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 10 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 3.200 at 5,736.000. Volume was 12% above average (neutral) and Bollinger Bands were 37% wider than normal.

Open High Low Close Volume___
5,732.8005,753.5005,686.8005,736.000 662,949,376

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 5,853.37 5,994.78 6,052.51
Volatility: 17 16 13
Volume: 582,319,936 607,014,400 584,798,016

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 5.2% below its 200-period moving average and is in an downward 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 bearish on .AXJO and have had this outlook for the last 50 periods.

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