Technicals | Jan 29 2013
By Michael Gable
Reporting season in the US is going well overall and the lack of any major disappointments has kept the markets meandering higher. We have also had news that Europe’s banks would pay back more of the Long Term Refinancing Options than previously forecast. Bond prices also continue to drop as investors switch into equities. While concerns about the debt ceiling are still very real, the slow trend of improving market conditions and sentiment continues to increase. While another correction in shares is inevitable, the risks of it getting out of hand continue to ease. However, reporting season in Australia will be interesting to watch as earnings for Australian companies haven’t recovered as well as their US counterparts so I’d expect to see a bit of volatility in a few more of our stocks during the month of February.
ASX 200
A close above 4800 on the XJO suggests a push up towards 5000 now. There is nothing very interesting about the way the market is trading here so we will most likely slowly grind higher for the time being. I will just have to reiterate my previous comments that while the market is overbought, we haven’t seen a clear reversal just yet. However, a reversal probably won’t be too far off from this point. When we do get a reversal, due to improved market conditions and sentiment, I am still only expecting an initial pullback of about 200 points, otherwise the next correction could see a move down to 4600, which would represent a healthy buying level.
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Visit Michael Gable's website at www.michaelgable.com.au/.
After leaving Macquarie Bank's Securities Group in 2008 after many years of service, Michael has gained a highly regarded reputation in the financial services industry. As a Private Client Adviser with Novus Capital, Michael has become a popular live commentator and analyst for Sky News Business Channel’s “Your Money, Your Call” program. He is also the author of the weekly stock market report “The Dynamic Investor”.
Michael assists investors to achieve their goals by providing advice ranging from short term trading to longer term portfolio management.
Michael deals in all ASX listed securities and specialises in covered call writing to help long term investors protect their share portfolios and generate additional income.
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
Disclaimer
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