Australia | Oct 19 2013
The uptrend holds for a second week with the market closing on its highs. The market is overbought in the short term and has cleared long term resistance. The market has been testing long term support on the monthly and has held two sell downs. The weekly outlook shows upside opening up with an upside target at 5481. The downside shows resistance to 5313 and a break below this level may see a rapid sell off. This indicates there is high risk in the market next week. The trend and momentum should see prices continue to rise however the stop for next week is 5424 and the market will need to close +100 points to hold the weekly uptrend. It is likely that another peak in the market will be seen this week. Volume was higher last week although volume decreased as prices rose.
The short term daily stop for Monday is 5298 and a close below this level on Monday will see the market on a downtrend on a daily and weekly basis – Monday has daily upside to 5335. The market has bounced strongly from oversold conditions and we favour consolidation. Any strength from here will put the daily RSI at extreme levels.
The market has broken out and there is limited support for the market under 5300. Volumes on the rally indicate there is a high risk of a pull back next week and the stop confirms the risk is to the downside. We saw limited volume at the lows a fortnight ago and we are now seeing limited volumes at this peak. The daily will indicate the peak and any move to a daily downtrend will present a selling opportunity. The trend holds on all three timeframes and the daily and weekly are both at risk.
Bulls held the sellers on Monday and held the market neutral before a rally on Friday. The bulls did well to hold on to the trend but face a 100 point hurdle next week to maintain the trend. Upside resistance can be seen at 5345, 5368 and 5392. A close above 5424 next week will hold the weekly uptrend. Upside resistance can be seen to 5481 and a break of this level will lead to a breakout. The bulls have limited support below 5300 and 5200 to 5250 shows support in the medium term.
Bears tried to pressure the market on Monday and held the market flat for the majority of the week. Volumes indicate sellers are remaining patient. The important supports for next week are 5321 and 5313. The stop for the week is +100 from the close and it is likely a medium term peak will be seen in the market this week. A new daily downtrend will be the key to entering new shorts. Refer to daily reports for updates.
iQUANT FORECAST RANGE 5313 – 5481
PIVOT POINT 5424
Review of prediction from 11th October 2013 for last week
The downtrend has ended after two weeks. The market was oversold last week and bounced to finish the week neutral. The market has been testing long term support on the monthly which has led to increased volatility. The weekly outlook shows upside to 5335 and downside to last weeks lows to 5128. The congestion zone from last week between 5257 to 5275 remains as key resistance and the weekly stop for next week is 5257. This indicates the bulls have a lot of work to do to avoid a dead cat bounce. Volume was up on the week and looks likely to continue rising.
The short term daily stop for Monday is 5190 and the daily upside can be seen to 5246. A close below 5190 on Monday will see the market on a downtrend on a daily weekly and monthly basis for the second time in a fortnight. The important supports for next week are 5204, 5170, 5156 and 5128. Upside resistance can be seen at 5241, 5264 and 5281. AUDUSD had a flat week and holds the weekly uptrend and is pushing upper limits at 0.948. SP500 bounced from oversold levels in a similar pattern to the ASX with 1711 last weeks weekly pivot.
The market has bounced from oversold and the trend is neutral. Volumes remain the key with limited selling at the lows indicating patience from sellers. . We continue to favour weakness with the start of a new weekly downtrend. We remain neural and look for new short positions with the weekly stop at 5257 and resistance to 5281. . A close below 5257 next week will see the start of another downtrend and the market will look to test the lows of last week.
Bulls held the sellers and pushed the trend back to neutral. The market gapped higher on Friday and the bulls have a lot of work to do to maintain the trend. A close above 5258 next week will see a new weekly uptrend. Upside resistance can be seen to 5335 and a break of this level will lead to a breakout. The bulls have monthly support continuing to hold the sellers and have survived the first selling pressure in three months.
Bears broke supports and got the market to oversold but have relinquished momentum with the weekly trend back to neutral. The market will need to rise another 30 points to maintain a neutral trend and it is likely last Fridays bounce will turn out to be a dead cat bounce and a retest of last weeks lows is highly likely. A new daily downtrend will be the key to entering new shorts.
iQUANT FORECAST RANGE 5128 – 5335
PIVOT POINT 5258
ACTUAL 5176 – 5321
The market started the week with a sell down and it appeared the earlier rally would be a dead cat bounce. Monday’s daily stop at 5190 was tested before the market closed higher holding the daily uptrend. The daily uptrend held everyday of the week. Wednesday saw another test of the daily uptrend and the highest volume of the week. Friday saw the weekly resistance at 5281 break and the market rallied to end the week.
The weekly stop at 5258 held the market until Thursday and remains a key level to monitor. Market closed on the highs with volumes falling from Wednesday. The market finished with a 92 point gain and is overbought in the short term. Monthly support lies at 5200 and has held the second attempt at a sell off. Short term longs hold with a stop at 5298 and the weekly uptrend holds. The SP500, AUDUSD and GOLD all punched higher and broke out of recent ranges. The market continues to recover from oversold conditions and has risen 4% from the lows. The predicted range has held with the uptrend target missing by 14 points. 5335 is key now key resistance to the upside.
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ASX200 report tracks the December ASX200 SPI. The ASX200 index is currently trading at a 7 point premium to the futures. All levels in this report refer to the ASX200 SPI futures
The information contained in this communication is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have not been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Iquant Systems Pty Ltd (CAR No.435627) is a corporate authorised representative of Avestra Capital Pty Ltd (AFSL No. 292464).
Copyright © 2013 Iquant Systems, All rights reserved.
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