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ASX200: Need To Break 6050

Technicals | Apr 30 2018

By Craig Parker, asset manager, Moat Capital

Not much to report this week as there was good news all around with the US market reacting mildly to the 10 Year Treasury Note breaking the 3 barrier whilst settling back down rather promptly below 3, which provided a little breather for equities. And then there was the geopolitical risk reducing with North Korea. The Middle East is still a mess and providing some happiness for investors in energy stocks. As far as our overall market goes is it the monthly, weekly or daily chart to pay attention to.

The monthly price action looks great with the daily and weekly a little less so. The most recent peak on the daily is around 6050 and the market would need to go higher than this level to break its recent down trend. The peak is lower when looking at the weekly chart with the level around 6000. The recent counter trend up in the medium-term downtrend is reasonably strong so it could be an indication of a resumption of the overall longer-term uptrend however, I would expect some resistance around the 6000 level.

The only issue longer term is conditions that suggest peaking, specifically in the US market with historically low unemployment and earnings beating expectations. The contrarian investor would be heading for the hills. On the US market the S&P 500 looks like it is going to be stuck between the 2580 and 2780 levels providing some opportunities for traders in the medium term. Other points of note are the US volatility index nearing support levels and Gold nearing support levels both of which are indicators of risk off if they bounce from their support levels. Enjoy your week!

ASX200 daily

ASX200 weekly

S&P500 daily

S&P500 VIX daily

US ten-year yield daily

Authorised Representative Life Plan FP AFSL 449658

www.moatcapital.com.au

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