Technicals | Oct 31 2023
By Michael Gable
Share markets have had another negative week as they entered that fearful stage where all news is bad news. The war in the Middle East is taking centre stage, but strong GDP numbers out of the US have markets worried that rates won't be coming down soon. This is despite bond yields actually moving lower in the past several days.
Generally, a strong economy leads to higher share prices – we just have to ignore the daily noise. We remain at that stage where we are looking for signs of a bounce as most of the damage at the index level has been done.
This week's report has an updated chart of the S&P500 Index.
In our charting analysis last week, we noted that "a strong bounce here would be positive with a break above 4400 adding to the bullish case. Further weakness from here will have us targeting support near 4100 before reassessing."
We can see that the S&P500 Index took the path of weakness and managed to find the support level near 4100. This is precisely where it bounced last night.
The index is at major trend-line support now as we reassess what it could do from here.
A push above 4200 would start to look more positive for the index, but 4300 is the nearest major level that we need to see the index overcome. A weak close below 4100 would be a negative sign and that could then have us targeting 3800 as the next support level.
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Michael Gable is managing Director of Fairmont Equities (www.fairmontequities.com)
Fairmont Equities is a share advisory firm assisting Private Clients with the professional management of their share portfolio. We are based in the Sydney CBD but provide services to private clients across Australia. We believe that the concepts of fundamental analysis and technical analysis of stocks are not mutually exclusive. Regardless of whether you are a trader or long term investor, combining both methods is crucial to success. As a result, the unique analysis of Fairmont Equities is featured regularly in the media such as Sky News Business, CNBC, The Australian Financial Review, and the ASX newsletter. Contact us for a free trial of our research and information on our portfolio management services.
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
Fairmont Equities Australia (ACN 615 592 802) is a holder of an Australian Financial Services License (No. 494022). 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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