Although the ASX200 index is NOT rated as a technical sell, given a technical top formation has not been generated, there is reason for caution relating to the...

Although the ASX200 index is NOT rated as a technical sell, given a technical top formation has not been generated, there is reason for caution relating to the sustainability of the rally. The index has retreated from the upper end of a trend channel that originated in 2008. Over the last 2 weeks an increasing number of stocks have reached previous technical buy signal target levels (11 completed stock buy signal technical trades during this period). The big four banks are now in overbought territory on a momentum basis and currently NO BANK STOCKS ARE RATED AS TECHNICAL BUYS (given targets have been reached). The ASX200 index is approaching overbought levels on a longer-dated RSI / momentum basis, and is already located in overbought territory on a short term RSI measure.