Technicals | Nov 05 2018
By Craig Parker, asset manager, Moat Capital
October horribilis has now passed and the 5650-support level has held up. The ASX 200 is now having the counter trend back towards the 200-day moving average where it will test for resistance. That of course assumes the ASX 200 reaches the 200-day moving average. There is a very good possibility that it won’t, considering the significant sell off over the past few months indicating a Bearish shift in momentum.
As far as levels goes the 6000 to 6100 level will be one to look out for before another possible retreat. On the positive side the 5650-level held up so this may provide some support on the next sell off. A lot will depend on our Financial sector which you can see in the below weekly chart still has some room to go down before the next support level is hit. February will be an interesting month to hold out for with the Hayne commission report recommendations. This could go either way with the recommendations being on the light side for the Banks considering their funds already committed to possible recommendations a positive. The Banks are trying to get ahead of the game and take the pain now only to benefit in February when the recommendations aren’t as severe as expected. That is the hope at this stage. Obviously, it could go the other way.
AMP shareholders should be the most concerned with a large part of their financial planning model based on the grandfathered trail commission system. Either the planners will be hit or AMP. Will be interesting to see how this plays out. On the International front which could affect our market is that Oil is ready for a move back up after it has had a decent counter trend in a medium-term uptrend. This isn’t great for our local market considering the high levels of debt most homeowners hold and their low level of savings. Consumption will be curtailed if more is spent on fuel. This combined with home prices dropping further and the media loving the negative property headlines which feeds into investors psyche. Enjoy your week!
ASX200 financials ex-REITs weekly
Brent crude futures weekly
Authorised Representative Life Plan FP AFSL 449658
This message contains privileged and confidential information intended only for the use of the addressee named above. If you are not the intended recipient of the message you are hereby notified that you must not distribute, copy or take action in reliance of the information contained in this message. If you have received this message in error, please notify Life Plan FP immediately. Any views expressed in this message are those of the individual sender, except where the sender specifically states them to be the view of Life Plan FP.
This email message is intended only for the addressee (s) and contains information, which may be confidential. If you are not the intended recipient please do not read, save, forward, disclose, or copy the contents of this email. If this email has been sent to you in error, please delete this email and any copies or links to this email completely and immediately from your system. The information in this email is not to be taken as taxation, investment or personal advice and is only an indication of the views of the writer and cannot be relied upon by the receiver. Should the information be acted upon the receivers are doing so at their own risk. If the receiver requires this advice to be used and acted upon they will require this to be presented on the letterhead of the writer. Life Plan FP have made every reasonable effort to ensure the information provided is correct, but Life Plan FP makes no representation or any warranty as to whether the information is accurate, complete or up to date. To the extent permitted by law, Life Plan FP 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.
Reprinted with permission of the publisher. Content included in this article is not by association the view of FNArena (see our disclaimer).
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.
FNArena is proud about its track record and past achievements: Ten Years On