Technicals | Jul 30 2018
By Craig Parker, asset manager, Moat Capital
And the stars aligned! Last week saw iron ore prices jump which helped fuel the impetus for a bullish range on the weekly Materials chart, which coincidentally occurred right on a primary uptrend line. This combined with some consolidation in the Financials sector around the 200-day moving average which you can see in the daily chart below. These two factors have provided some bullish action and I mentioned last week that 6500 was the target to look out for. This is the upper end of the weekly channel on the ASX 200 and I would suspect some resistance at this level if not sooner.
The royal commission in a weeks’ time is moving focus to the Superannuation sector which will include some CBA related products and other bank owned Superannuation funds so, one would expect some dirt to come out of that and some resultant moves down. I also mentioned to keep an eye on the US 10 Year Treasury Note and since then it has subsequently broken out of the pennant pattern and is now banging up against the previous resistance level of 3. A break through here and it will be interesting to see how markets react considering it is open sky to the 4 level.
The S&P 500 overnight looked a bit shaky. So, in short enjoy this window of optimism as I get the feeling the coming weeks will see the beginning of a shift in momentum. Perhaps the S&P 500 was illustrating the early signs of a technical shift in momentum with the high volatility period combined with a break below the secondary uptrend line back in March. Enjoy your week!
ASX200 weekly
ASX200 financials ex-REITs daily
ASX200 materials weekly
S&P500 weekly
US ten-year yield daily
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