Technicals - ASX200 index next major downward move underway
The ASX200 index previously generated a technical sell signal at 4909 on 15/12/15. Friday's close below the 4909 support level has generated a further technical sell signal which re-enforces the expectation for a pullback to 4633. It is difficult to see how the Australian market can stage a sustained rally in the near-term from a technical viewpoint due to 1) the global market trend is negative, with the potential existing for further technical sell signals to be generated by the S&P500 index ( refer to link to last week’s Wire (VIEW LINK) and also by the Shanghai Composite index; 2) the commodity price technicals remain negative (with no sign of base forming); and 3) a reduced number of large cap stocks remain rated as technical buys.
Angela has over 30 years experience in the technical analysis field. She provides technical analysis coverage of major Australian and global stocks / key markets, including provision of a bespoke technical service to wholesale clients.