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ASX200: Looking Good

Technicals | Apr 24 2017

By Craig Parker, asset manager, Moat Capital

Are we heading back up to the elusive 6000? That is the big question! Will we hit it this time or just tease it like we did last week? If I were to ignore the upcoming geopolitical events (North Korea and the French first round elections) then the technical factors are looking good for another run at the 6000. The daily, weekly and monthly price action is all positive and in uptrends with successive higher highs and higher lows. The daily has broken up from the 60-day moving average indicating strength.

Some other positives for equites is the S&P 500 breaking up through the short term down trend line indicating a possible shift in short term momentum. The other is Gold seems to be floundering which could suggest the apparent safe haven asset is struggling and this could be a good sign for equities in the near term. However, you ignore the geopolitical events at your own peril and from a technical perspective I would be keeping a keen eye on the 5800 level and the medium-term uptrend line. The bearish divergence on the weekly RSI indicator could also be an issue however the RSI indicator is not the most reliable as it can be illustrating divergence for some time before you see any correlation in the actual market. Assuming we did hit the 6000 mark then I would be getting a little nervous as it may be a possible reversal point.

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.

Moat Capital has made every reasonable effort to ensure the information provided is correct, but Moat Capital makes no representation or any warranty as to whether the information is accurate, complete or up to date.  To the extent permitted by law, Moat Capital accepts no responsibility for any errors or misstatements, negligent or otherwise.  The information provided may be based on assumptions or market conditions and may change without notice.

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