Technicals | 10:30 AM
Tony Sycamore, Market Analyst, IG shares his technical views on the Nasdaq, ASX200, gold and crude oil.
By Tony Sycamore
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
In early February, the Nasdaq 100 fell to a low of 24,455—its lowest level in two and a half months. This decline followed the formation of a potential double top, a “loss of momentum” weekly candle, as well as on signs of divergence between the three key US indices.
While the rebound into last week’s high of 25,382 eased short-term downside risks, the index really needs a sustained break above the 26,150/200 resistance area to reignite its upside prospects.
Until then, allow for the correction in the Nasdaq 100 to play out further. This should see the Nasdaq 100 test its 200-day moving average at 23,910, a level that coincides closely with the November 21st low of 23,854. A sustained break below the 23,910/23,854 support zone would open the way for a deeper decline towards 23,000.
ASX200
Last Monday’s rebound from the support zone just below 8700 (that included the 200-day moving average at 8692.3 and the year to date low at 8675.6) saw the ASX200 retest the 9115.2 record high on Thursday – in line with our expectations.
Following its intraday rejection from this level, we moved back to a neutral bias, with a sustained break of the 9105/15 double top needed to open the way for the ASX200 to make further gains towards 9400/9500.
Crude Oil
WTI Crude Oil finished lower overnight at US$62.30 (-0.83%), on reports that US-Iran nuclear talks in Geneva reached a “general agreement on some guiding principles”.
While a meaningful breakthrough would ease geopolitical tensions and potentially boost Iranian oil supply, we remain sceptical that this outcome will be achieved in the short term.
Technically, crude oil remains firmly within the US$55–$66/bbl trading range that has defined the past six months.
A sustained break above the top of the range would require further escalation headlines, while further signs of de-escalation will likely see a return to the middle of the range US$60.00ish.
Gold
Gold finished lower at US$4880 (-2.23%), on reports that US-Iran nuclear talks in Geneva reached a “general agreement on some guiding principles, thereby removing some of the geopolitical risk premium built into the gold price.
After the recent “flash crash” in precious metals, open interest and speculative positioning have been significantly reduced to very neutral levels, leaving the market less vulnerable to sharp swings but also limiting immediate upside momentum without fresh catalysts.
Technically we favour a retest of the US$4402 “flash crash” low before a retest of the US$5600/oz high.
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.
Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided.
FNArena is proud about its track record and past achievements: Ten Years On