Technicals | Apr 29 2010
By Rudi Filapek-Vandyck
Another day of weakness is pulling the ASX200 index ever so closer to technical support at 4800, observes the TechWizard. He also notes the Australian share market has now been falling for three weeks in a row, while the US share market has continued rising.
Is Australia paying more attention to Asia (China) and Europe than the Americans these days?
The Wizard observes the 20 moving average on his price charts for the ASX200 is now in between 4800-4820. This should be the market's first point of support, he notes.
However, in case the index fails to remain above this first point of support and it falls through 4800, a further decline of up to 300 points is, from a pure technical point of view, a genuine possibility, reports the Wizard. This is because once support at 4800 gives in the next technical target becomes 4500, or more than 300 points lower than where the market is today.
He notes there is at present clear divergence between price action and the MACD indicator, which is a signal of internal weakness.
From a technical point of view, a new bear market won't start until the index falls below 4500, so that remains the key level to watch, says the Wizard.
.jpg)
