ASX200 Rally To Ease

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By Michael Gable 

Last week we noted that the Australian market was likely to stall here. We also saw the Australian dollar plunge 2c at one stage. Resumption of Australian dollar weakness, three of the big banks going ex dividend, and funds being allocated to the Medibank float could be enough to see our market take a breather. We have looked at the chart for the S&P/ASX 200 Index (XJO) in this week’s report.
 

The XJO appears to have stalled at the resistance level of 5550. After such a great rally in the last few weeks, we would expect the market to now ease back. The first level of support would be a touch under 5400. That also happens to be the 38.2.% Fibonacci retracement level. There is always a possibility that we retest the October low, but given the strength of the recent rally, it appears unlikely that the market will breach that level before the year is out.
 

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Michael Gable is managing Director of  Fairmont Equities (www.fairmontequities.com)

Michael assists investors to achieve their goals by providing advice ranging from short term trading to longer term portfolio management, 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

Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities Pty Ltd is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.

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