Technicals | Jun 27 2023
By Michael Gable
It has been an interesting few days on the share market. This time last week we were expecting a consolidation in the S&P500 Index, but the Australian market, which clearly lagged the US these past few months, was finally getting a move on in the right direction.
However, despite the S&P500 Index easing back about -2.7% from its recent peak, the S&P/ASX200 Index has fallen almost -4%. Of course, you would expect it to be the other way around.
So, it looks like the Aussie market is back to where it was a few weeks ago and we are back to square one looking for the next change of trend. Our observation is that volumes for a range of stocks on the way down these past few days have been fairly unremarkable, so it would be premature to get too negative on the index.
Due to the past few days, unfortunately, the number of clear buy signals has dried up and it looks like we need just a little more time to see what the next move from here will be. Today's report has a chart of the S&P/ASX200 index to illustrate where we are at the moment.
Several days ago, we saw the XJO break out of a bull flag and retest the April high near 7400. Naturally, you would expect a consolidation near the April high.
However, instead of trading sideways for a few days to use up some time, the index sharply pulled back into the range.
The XJO is now at a crossroads here with a reasonable amount of support in this 7000 – 7100 zone. It may spend some time moving sideways from here to form a new base before it gets going again.
A push above 7200 would make the overall price action look more positive again. Otherwise, if we see further weakness from here, then 6900 is the major level that needs to hold.
A break under that would be a negative sign for the index. For the moment, however, we are neutral in the short-term until we can see more evidence of direction.
Content included in this article is not by association the view of FNArena (see our disclaimer).
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
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Disclaimer
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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