Technicals | Feb 13 2017
By Craig Parker, asset manager, Moat Capital
Risk is back on and the technical stars are aligning with the short, medium and long term trends all in an uptrend. You can see on the ASX 200 daily chart that today was a clear breakout around the 60-day moving average up through the short-term downtrend line which suggests the recent counter trend has run its course. This was all on the back of the S&P 500 breaking out overnight. It seemed the US market was just waiting for any sort of good news to be able to move higher and we were happy to follow.
A close eye will need to be on the 5800 level where the most recent daily peak had formed. A break through the 5800 level and it is clear sky up to the 6000 level. If you look at our monthly chart we are consolidating above a recent 60 and 200 moving average crossover. Another positive for our market is the continuation of the uptrend in the Chinese market as can be seen in the below Shanghai Composite chart.
The only negative is that the S&P 500 weekly chart is technically getting into the overbought territory however, history has shown it can stay overbought for some time before a significant correction. Currently the trend is your friend.
Authorised Representative Sentinel Private Wealth AFSL 344762
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