Technicals | Jan 27 2015
By Michael Gable
Markets received the result they were waiting for from the ECB and that is a bigger-than-expected bond buying program. Our dollar has dipped under US$0.80 and we suspect that gold will ease off here after rallying a bit too hard the last couple of weeks. Another news-worthy item from last week is the Canadian central bank cutting interest rates. Their economy is a similar commodities-based economy to ours, so the chances of a rate cut here in Australia have now increased.
Good for consumer confidence, good for high yielding stocks. The market overall, having been stuck in the slow lane for the last few months may well try to get trending again, finally finding some excuses to do so, hence we revisit the chart of the S&P/ASX 200 Index in today’s report.
For a few weeks now we have been looking for support around 5300. That is precisely where our market rallied from last week. Because of last week’s price action, the chart for the index now appears more positive. You will notice that it has broken the downtrend line that was created since last year’s peak. Also, it has managed to take out the December high in a very quick period of time, which is also encouraging. The next obvious resistance level is that November peak near 5050, and beyond that the index may try to push to retest last year’s high.
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Michael Gable is managing Director of Fairmont Equities (www.fairmontequities.com)
Michael assists investors to achieve their goals by providing advice ranging from short term trading to longer term portfolio management, deals in all ASX listed securities and specialises in covered call writing to help long term investors protect their share portfolios and generate additional income.
Michael is RG146 Accredited and holds the following formal qualifications:
• Bachelor of Engineering, Hons. (University of Sydney)
• Bachelor of Commerce (University of Sydney)
• Diploma of Mortgage Lending (Finsia)
• Diploma of Financial Services [Financial Planning] (Finsia)
• Completion of ASX Accredited Derivatives Adviser Levels 1 & 2
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Disclaimer
Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities Pty Ltd is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.
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