Technicals | May 07 2018
By Craig Parker, asset manager, Moat Capital
This past week saw some much-needed relief from the relentless onslaught from the Royal Commission public hearings on the financial sector and the markets reacted with some relief. AMP even held above the important $4 level. The ASX 200 surpassed the key level of 6050 on the daily and 6000 on the weekly chart mentioned last week which has the weekly and monthly charts now both in uptrends and the daily chart suggesting likewise with the recent peak higher. The materials sector has helped propel our market up the last month however the past week has mirrored the recovery in the Financial sector as you will see by the respective charts below.
I expect there will be a little breather in this move up in the short term which should provide buyers an opportunity to buy the next trough in an overall uptrend. The reason behind this is the Financial sector is around old support levels which can provide some resistance and the sector is still in a clear downtrend. I would be watching around this level as it may create some uncertainty in the near term. Also, our dollar is due for a counter trend up in its current downtrend cycle which would place some pressure on our market in the short term. Some good news is the S&P 500 is looking like its about to break out to the upside with a strong move up Friday and the key indicators to watch here are the 60 and 200 day moving average which the S&P 500 is currently wedged between.
ASX200 daily
ASX200 weekly
ASX200 financials ex-REITs daily
ASX200 materials daily
S&P500 daily
AUDUSD daily
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