Technicals | Oct 12 2021
By Michael Gable
The S&P/ASX 200 Index still looks vulnerable here but finding some support near 7200 these past few days or so has reduced the bearishness of it somewhat. On balance though, it still looks like the risk is still to the downside, and a break of 7200 would be a negative. In today's research however, we have included a chart of the S&P 500 Index to show the key levels that would indicate whether the market is ready to head higher or lower.
Since the COVID lows, the S&P 500 Index has held remarkably well above the 50-day moving average. However, we have now seen it spend the most time under that line since those lows. The last few days has seen it reject the underneath of the moving average, which is a negative.
The big question is whether we get more of a downtrend from here, or are we just seeing the formation of a bull flag (diagonal lines). At the moment, we are anticipating a fall back towards 4300. A bounce from above that level (a higher low), and then follow-through above the 50-day moving average would be a positive. A dip under 4300 would further confirm that the index is on course to go lower.
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Michael Gable is managing Director of Fairmont Equities (www.fairmontequities.com)
Fairmont Equities is a share advisory firm assisting Private Clients with the professional management of their share portfolio. We are based in the Sydney CBD but provide services to private clients across Australia. We believe that the concepts of fundamental analysis and technical analysis of stocks are not mutually exclusive. Regardless of whether you are a trader or long term investor, combining both methods is crucial to success. As a result, the unique analysis of Fairmont Equities is featured regularly in the media such as Sky News Business, CNBC, The Australian Financial Review, and the ASX newsletter. Contact us for a free trial of our research and information on our portfolio management services.
Michael is RG146 Accredited and holds the following formal qualifications:
Bachelor of Engineering, Hons. (University of Sydney)
Bachelor of Commerce (University of Sydney)
Diploma of Mortgage Lending (Finsia)
Diploma of Financial Services [Financial Planning] (Finsia)
Completion of ASX Accredited Derivatives Adviser Levels 1 & 2
Fairmont Equities Australia (ACN 615 592 802) is a holder of an Australian Financial Services License (No. 494022). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.
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