Technicals | Sep 03 2018
By Craig Parker, asset manager, Moat Capital
It's always good when a week goes according to plan with the political turmoil out of the way we managed to see some recovery in the Banks. This should continue in the short term considering the big remaining 3 will likely increase their rates as per Westpac this week. The ASX 200 is trying desperately hard to get back to the pre GFC high set back in November 2007. Good thing for dividends otherwise our market returns would be very dismal over this period indeed.
Especially considering the S&P 500 recovered it’s GFC losses by 2013. Assuming we were to continue the current uptrend as can be seen in the monthly chart below it is likely we will reach that milestone in the next 12 months. More than 11 years to recover. So much for markets recovering your losses in a few years.
As for forecasts which is always a risky business, I mentioned some weeks ago about our market heading for the 6500 level which it is meandering towards. I’d expect to see some counter trend around this level before we try and lurch towards the pre GFC high. The key chart to keep an eye on is the Financial daily chart and the 60 and 200 day moving averages. The price action did go above the 200-day moving average however I would’ve liked to have seen consolidation for longer above this key average.
Considering the political turmoil was an unforeseen and one off (lets hope) event it’s hard to judge whether the price action would’ve held above this average if not for the PM ousting. Currently it is on the negative side with the next week or two being critical. On the plus side our dollar dropping into the 71’s might just help us out. So far, we are balancing it out, for how long who knows. Enjoy your week.
ASX200 monthly
ASX200 financials ex-REITs daily
AUDUSD daily
Authorised Representative Life Plan FP AFSL 449658
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