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ASX200: Looking Bullish

Technicals | Mar 12 2018

By Craig Parker, asset manager, Moat Capital

The struggle between the bulls and the bears was on in earnest this week with the bulls marginally taking the lead later in the week. The inverse head and shoulders pattern I mentioned last week has formed with the right shoulder forming its low on Monday. Following a strong gain on the S&P 500 on Friday the neck line could be broken this week signaling a bullish optimism.

Technically markets are looking bullish in the short term with the only negative being the US 10 Year Treasury Note looking like it is inching back up. Seems markets have headed back into the geopolitical territory where any good news is reflected in kind. Unfortunately, with this approach and the likes of Trump, Putin and Kim Jong-Un and now Xi this could all change with a bad tweet. Volatility has also retreated which is a good sign however I don’t expect this too last with higher volatility likely in the medium term as the US 10 Year Note heads higher.

Good news on our domestic front with the Financial sector forming a higher low than the previous confirming a medium-term uptrend albeit slightly. The previous higher peak and recent higher trough aren’t significant, but they are there nonetheless and hopefully point to our market getting some bullish momentum back, even if only tepid. Some specific local sectors too look at are the Small Ords and the Listed Property Trusts. I have some concern with the Small Ordinaries with recent strong bearish RSI divergence and conversely the Listed Property Trust sector could provide some short-term gains now it has bounced off it’s support levels. Have a good week!

ASX200 daily

ASX200 financials ex-REITs weekly

ASX small ords weekly

ASX200 REITs weekly

S&P500 daily

US ten-year yield 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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