Technicals | Feb 06 2024
By Michael Gable
With US share markets already trading at new highs, the S&P/ASX 200 Index finally followed by breaking higher last week to see new all-time highs.
The past few days have been fairly volatile, and overnight we have seen a push higher in US yields and the US dollar. However, we can squabble over when the first rate cut will occur, but the fact is that rates will be heading lower, and the US economy is growing again.
Funds held in money markets are sitting near all-time highs, so all of the bears who were counting on 2023 to deliver a recession and a crash in housing and share markets are sitting in cash and missing out. This cash will need to get to work as it becomes clear to them, eventually, that strong GDP and falling rates will provide a great backdrop for assets in 2024.
Today's charting section has an updated chart of the S&P/ASX 200 Index (XJO).
As we have foreshadowed for many months now, the XJO was forming under resistance near 7600 and it was only a matter of time until we saw an upside break.
That finally occurred last week (circled). As we can see on this chart, this is only the start of a major move higher where we expect a multi-month uptrend to occur which will lead to levels well above 8000.
Price action is a bit choppy in the short-term, but longer-term, price action is looking very positive. Dips are a buying opportunity.
Content included in this article is not by association the view of FNArena (see our disclaimer).
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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