Australia: S&P/ASX 200 (.AXJO) stocks seen better than expected results were rewarded with strong gains
The Australian sharemarket closed at four-month high on Thursday as better than expected results were rewarded with strong gains.
The S&P/ASX 200 Index rose 66.4 points, or 1.1 per cent, to 6092.5 while the broader All Ordinaries climbed 67.3 points, or 1.1 per cent, to 6159.1.
“We’re seeing companies that were sold off in the October and December period deliver some news that isn’t as bad as people think,” Atlas Funds Management chief investment officer Hugh Dive said.
“It’s still pretty early days but we’re now getting concrete data points and some of those companies have done quite well.”
The major banks led the market on Thursday, extending their gains for the week and giving the market its fourth straight gain.
Commonwealth Bank led the gains rising 2 per cent to $74.06, Westpac climbed 1.9 per cent to $26.88 and ANZ edged 1.7 per cent higher to $26.86. NAB shares advanced 1.3 per cent higher to $24.93 before entering a trading halt in the final hour of trade, pending an announcement on leadership changes.
IDP Education announced a 34 per cent lift in interim net profit, pushing its shares up 21.2 per cent to $13.80. The company said India continued to be a stand-out region and noted increased volumes in Canada and the UK.
CYBG shares rose 17.9 per cent to $3.76 after it delivered an upbeat December quarter trading update following the close of trade on Wednesday. The British bank said it experienced greater than expected synergies from it purchase of Virgin Money in October and expected to deliver a minimum of £150 million ($273 million) in savings by the end of its 2021 financial year, beating its initial forecast for £120 million.
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 5,860.47.
The projected upper bound is: 6,256.20.
The projected lower bound is: 5,943.85.
The projected closing price is: 6,100.03.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
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 28 white candles and 22 black candles for a net of 6 white candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 90.1545. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 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 75.30. 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 buy 68 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 222.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 7 period(s) ago.
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 66.400 at 6,092.500. Volume was 6% above average (neutral) and Bollinger Bands were 10% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 5,927.54 5,737.34 6,007.33
Volatility: 13 17 14
Volume: 682,259,264 607,907,776 590,284,864
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.
S&P/ASX 200 is currently 1.4% 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 22 periods. Our momentum oscillator is currently indicating that .AXJO is currently in an overbought condition.
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