Australian IPO market is booming – ASX

Australian IPO market is booming – ASX

The Australian IPO market is booming, with nearly 60 companies hitting the boards of the Australian Securities Exchange in the first half of the year — raising a total of $1.73 billion.

Resources companies have worked their way back into the ASX as speculative appetite for mining floats is on the rise after several years of muted investor interest.

Even though companies raised significantly less than last year, the number of initial public offerings skyrocketed by nearly 80 per cent to 59 listings. IPOs outperformed the ASX 200 by 5.4 per cent during the first six months and delivered an average mean first-day return of 15.3 per cent.

Performance was strong, but the quality of many floats is mixed at best, as numerous listings are speculative in nature and often somewhat premature. Wise-owl intelligence suggests that up to 20 per cent of all IPOs will struggle to create shareholder value in the long term.

Technical Analysis

Overall, the bias in prices is: Sideways.

Short term: Prices are stalling.

Intermediate term: Prices are ranging.

The projected upper bound is: 53.65.

The projected lower bound is: 50.99.

The projected closing price is: 52.32.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 27 white candles and 22 black candles for a net of 5 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 49.8906. This is not an overbought or oversold reading. The last signal was a buy 4 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 48.70. 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 112 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 -38. This is not a topping or bottoming area. The last signal was a buy 4 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 16 period(s) ago.

Rex Takasugi – TD Profile

ASX FPO closed up 0.510 at 52.300. Volume was 70% above average (neutral) and Bollinger Bands were 12% narrower than normal.

Open     High      Low       Close     Volume
51.830   52.480  51.820  52.300  706,224

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

Moving Averages: 10-period   50-period   200-period
Close:                       52.21           52.26          50.21
Volatility:                15                 16                17
Volume:                   443,119      398,203     417,168

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

ASX FPO is currently 4.2% above its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of ASX.AX at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on ASX.AX and have had this outlook for the last 6 periods.

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Ivy Heffernan

Ivy Heffernan, student of Economics at Buckingham University. Junior Analyst at HeffX and experienced marketing director.