Technicals | Apr 03 2017
By Craig Parker, asset manager, Moat Capital
So, close to the 6000. The market can taste it but we must wait for at least another week or two before we look at testing the 6000 barrier. The daily chart is in a confirmed uptrend again along with the weekly and monthly. Next week could be setting up for a counter trend back towards the 60-day moving average before we make another run for the 6000 mark. The weekly chart is looking good albeit still having the bearish divergence on the RSI with the saving grace that the RSI is not in seriously overbought territory.
Looking at the monthly chart the price action is heading into the top half of the channel which suggests it is getting close to needing a breather. It is rare that the market would go from the support level in a channel to the resistance level without at least a couple of corrections in between. The 6000 level could provide this impetus for a correction. On the commodities front there is a mixed bag. Iron Ore is approaching the old 80 barrier and it will be interesting to see if it can find support at this level otherwise the next level of support is around the 65 to 70 range. This would place some pressure on our market considering the effect of Iron Ore on our countries bottom line.
Even so the financial sector is pretty much driving the market moves at present. The Energy sector is looking interesting from a technical perspective with a very clear breakout up this week with adequate upside considering the sector has been punished in the last couple of years. The other major influence is the S&P 500 nearing a short-term downtrend line which could provide an excuse for some downside movement. Look out for the 60-day moving average and a break below this could indicate a larger correction towards the 200-day moving average.
ASX200 daily
ASX200 weekly
ASX200 monthly
S&P500 daily
Iron ore
Authorised Representative Sentinel Private Wealth AFSL 344762
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