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ASX200: Looking Good

Technicals | Feb 20 2017

By Craig Parker, asset manager, Moat Capital

Looking good! The technical trends lined up last week and delivered this week. Last week I mentioned to keep an eye on the 5800 mark which the market had trouble surpassing today. I doubt the 5800 level will be much of an issue going forward as the weekly chart doesn’t provide any resistance at this level and looks well set up to continue towards the 6000 level in the coming weeks. The monthly chart is also well set up and is about midway in the upward trending channel with the momentum indicators neither overbought or oversold. This contrasts with the S&P 500 which is technically overbought on the daily and likely to have a short-term correction soon. The S&P 500 weekly chart is also overbought so it should be interesting in the coming weeks to see if Trump's talk on tax reform continues to prop the market up or it runs out of puff.

Back to our market and there is some bearish divergence on the ASX 200 weekly RSI although, I would be waiting for a third peak lower on the RSI before getting prepared for a decent correction. If there happens to be a short-term pullback, then it will most probably be short lived. Assuming the market continues to trend up in the coming weeks this could create some overbought conditions.

ASX200 daily

ASX200 weekly

ASX200 monthly

S&P500 daily

 

Authorised Representative Sentinel Private Wealth AFSL 344762

www.moatcapital.com.au

Important Information

This document and its contents are general in nature and do not constitute or convey personal advice.  It has been prepared without consideration of anyone's particular financial situation, needs or financial objectives.  Personal advice should be sought before acting on any of the areas discussed.  The authors and distributors of this document accept no liability for any loss or damage suffered by any person as a result of that person, or any other person, placing any reliance on the contents of this document.

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