Technicals | 10:45 AM
Earlier today, Tony Sycamore, Market Analyst, IG updated his views and thoughts on financial markets, including the technical analysis updates below.
All material has been re-published with permission and does not by association represent FNArena’s views (we have none, we simply report).
First Up, Nasdaq100
Post the Nasdaq100’s surge higher on the 12th of May, we have been working with the view that the rally from the 21st of April 17,592 low is a Wave iii (Elliott Wave) that should be followed by a Wave iv pullback.
While it is possible a Wave iii high is in place at last week’s 22,041 print, a break of support at 21,500/450ish would confirm this and that Wave iv is unfolding back towards support coming from the 200-day moving average 20,800/500 area.
Providing this support band holds, it should then be followed by another leg higher for Wave v.
Aware that a sustained break below the 200-day moving average would be an indication of a possible double top formation and warn that a deeper pullback is underway.
ASX200
Last week, after the ASX200 clinched a new record high, we noted the RSI index was at its most overbought level since December 2023 (which was followed by a -4% pullback).
We also noted Wednesday’s push to new highs left in place “a loss of momentum” type daily candle. This was followed by downside follow though in Thursday and Friday’s sessions.
A sustained break of support at 8500 would increase the likelihood the ASX200 put in place a medium-term top last week at the 8639 high and that a deeper pullback is underway with the 200-day moving average at 8200 viewed as the initial target.
Until then, allow the ASX200 to extend its gains towards 8800.
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Crude Oil
WTI Crude Oil finished higher overnight at US$73.27, up 2.09%, as markets brace for the US to enter the Israel-Iran conflict; a move expected to ensure further volatility for crude oil in the sessions ahead.
Technically, while crude oil remains above the 200-day moving average at US$68.55 from which it bounced ahead of yesterday, a retest of last week’s US$77.62 high should be considered.
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Gold
Gold finished flat overnight at US$3,388 (0.10%), as markets prepare for the US to enter the Israel-Iran conflic; a move expected to ensure further volatility for gold in the sessions ahead.
Technically, while gold remains above support at US$3,300, a retest and break of the record US$3,500 remains possible.
However, should gold see a sustained break of support at US$3,300, it would open up the possibility of a deeper decline towards US$3,120/$3,100/oz.
Technical limitations
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