Technicals | May 17 2012
By Robert Clayton
ASX 200, last 4142 – Technical analysis is a method of identifying significant trending features in a market and in this case the ASX 200 is dangerously close to the support of 4110.
The ASX 200 now heading lower for a third week in a row now threatens the 4110 support level. A break of this level would implement further negative price action and pave a way towards 3980-90. However the support level at 4110 did hold in January 2012 and again for the period in February-March 2012.
The Stochastic shows a strong negative signal in the first graph (daily chart) as well as the weekly chart (second graph). In the daily chart, a bearish reversal day first strengthened the decline. However, as we approach the 4110 support level, demand may emerge as seen in the 3 previous occasions.
If breached, paves a way to 3980-90 and lower to the extreme level displayed at 3650-75. On the upside, resistance holds to 4300-10 and then 4400-55
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Rob Clayton – Senior Technical Analyst – has been providing technical analysis on Foreign Exchange, Futures, and Interest Rate products for the past 21 years. He held many senior analyst roles including the role of Senior Technical Analyst at Westpac Institutional Bank for 12 of those years. Rob is now part of the investments team at GTL Capital Management. Rob’s daily reports are read by institutional and professional clients in Australia, Asia, Europe and the Middle East.
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