article 3 months old

ASX200: Still On Track For 6000

Technicals | May 01 2017

By Craig Parker, asset manager, Moat Capital

Not much to say this week that wasn’t said last week from a technical perspective. Still on track for the 6000 following the lead set by the S&P 500 at the end of last week. The S&P 500 has all three trends now in uptrends, the minor, secondary and primary. The only negative on the S&P 500 is the formation of significant bearish RSI divergence on the weekly chart. As mentioned last week this isn’t always a reliable indicator and all other technical signs point to our market hitting the 6000-next week. If the North Korea situation doesn’t get out of hand or Trumps tax reform hit a hurdle then 6000 is looking good.

The French second round elections are decided the following week so no real geopolitical events other than those already mentioned. What I am keeping an eye on is the price reaction around the 6000 level and the medium to longer term uptrend lines. If they are broken to the downside then the market could head down around the 5700 to 5600 level. The one big issue that is being overlooked is the old theory of sell in May and go away. We are overdue for a down May as the past three years May has been relatively flat or up however the 4 previous years prior to 2014 were down. Gold looks like it is still floundering in the short term which is a good sign for equities in the short term. All in all, an interesting week ahead.

ASX200 daily

S&P500 daily

S&P500 weekly

Gold

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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