Technicals | Oct 27 2015
By Michael Gable
Last week saw the ECB indicate a likely expansion of its quantitative easing program which sent global markets higher, further helped on Friday by China cutting rates. The big four banks raised their interest rates and this has slightly increased the odds of the RBA making a rate cut next week on Melbourne Cup day. This means that the Australian market is increasingly finding more reasons to head higher from the recent sell-off. As a result, with some key technical levels broken, we look at the chart of the ASX200 (XJO) in today's report.
Our previous XJO comment three weeks ago made note of the positive price action and the likelihood of a low being in place. We cited 5300 as the next major level to overcome to make us "much more confident" of a low. That level was breached last Friday. We have also seen a crossing on the weekly MACD (circled) which implies a change of trend. Over the last couple of years, there has been a lot of price action around here so breaching the mid 5400's would take a bit of time. Once that resistance level is breached, then the next move up will be towards 5600.
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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
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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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