Australia: S&P/ASX 200 (.AXJO) Support at 6000

Australia: S&P/ASX 200 (.AXJO) Support at 6000

Australia: S&P/ASX 200 (.AXJO) Support at 6000

Australian shares are poised to edge lower at the open, as shares on Wall Street failed to hold early gains. ASX futures were down 6 points at 7.45am AEDT. The Australian dollar edged above the US71¢ mark, defying expectations of a retreat.

Focus remains squarely to the downside, where the significant 50% retracement lurks ominously, at 6003. If that gives way the index would be in serious trouble from the bullish perspective with the path from those March lows in the 6600 region barred by very few obvious areas of likely lasting support.

Much may depend on whether the index can hold up above the psychologically crucial 6000 level, now only 40 points or so away to the downside. The ASX has managed to hold above that for five months, which is only about half the time it managed at such altitudes during the last serious foray up here, back in 2007/8.

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 6,158.61.

The projected upper bound is: 6,131.80.

The projected lower bound is: 5,940.83.

The projected closing price is: 6,036.32.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black 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 21.0913. This is not an overbought or oversold reading. The last signal was a buy 3 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 32.57. 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 76 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 -255.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 3 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 sell 1 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -59.200 at 6,041.100. Volume was 3% below average (neutral) and Bollinger Bands were 17% narrower than normal.

Open High Low Close Volume___
6,100.3006,101.8006,033.6006,041.100 557,132,864

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

Moving Averages: 10-period 50-period 200-period
Close: 6,152.89 6,227.75 6,081.34
Volatility: 12 10 11
Volume: 531,733,568 587,072,000 560,757,248

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 0.7% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 23 periods.

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