Technicals | 10:30 AM
Earlier today, Tony Sycamore, Market Analyst, IG updated his views and thoughts on financial markets, including the technical analysis.
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
After six straight sessions of gains to last Wednesday’s 26,165 high, the Nasdaq100 fell away into the weekend.
In the process, the index has left a potential double top, continued divergence between the three indices, and a “loss of momentum” type weekly candle.
Collectively, these factors suggest the Nasdaq100 is attempting to form a high, though more confirmation is required.
Looking ahead, if the Nasdaq100 were to fall below uptrend support at 25,200 (tested and bounced from overnight) and then sees a sustained break below the 24,954 low from the 20th of Jan, it would set the stage for a deeper decline towards the 24,000/23,800 support level.
Aware that a sustained break above the 26,150/200 resistance area is needed to reignite the Nasdaq 100’s upside prospects.
ASX200
The ASX200 last week ran into sellers operating ahead of trend channel resistance 9000 area, before falling below trend channel support on Monday.
However, the rebound that followed yesterday has allowed the ASX200 to return to the safety of its upward sloping trend channel, from where it can continue its ascent towards the 9115.2 record high.
Aware that a break below trend channel support at 8800 and then below Monday’s 8746.2 low would create technical damage and warn of a deeper pullback, initially to the 200-day moving average at 8667.
Crude Oil
WTI Crude Oil is trading higher at US$63.99 (up 2.66%), as renewed Middle East tensions revive supply disruption concerns.
The rise follows the US downing of an Iranian Shahed-139 drone that aggressively approached the USS Abraham Lincoln in the Arabian Sea—shot down by an F-35C fighter jet.
Combined with Iranian gunboats harassing a US-flagged tanker in the Strait of Hormuz, this cat-and-mouse type of dynamic is likely to persist while US-Iran deal talks continue.
Technically, crude oil appears comfortable within the US$55–US$66/bbl range it has spent the past five months.
Gold
Gold is trading higher at US$4947 (up 6.13%), extending its rebound from the US$4402 low it hit on Monday evening.
While it’s tempting to believe the storm clouds over precious metals have passed, markets rarely work that way. Typically, a major shakeout is followed by a period of cleaning up the debris and dealing with aftershocks as we have seen in crypto over the past four months.
Although the long-term fundamentals that drove gold’s heady gains, such as unsustainable fiscal policy and geopolitical concerns, remain intact and will eventually return to focus, we expect further cooling in the precious metals space in the near term and would be careful chasing the immediate rebound.
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
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