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ASX200: Uptrend

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.

ASX200 daily

ASX200 weekly

ASX200 monthly

S&P500 daily

Shanghai Composite

Authorised Representative Sentinel Private Wealth AFSL 344762

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.

Reprinted with permission of the publisher. Content included in this article is not by association the view of FNArena (see our disclaimer).

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