Technicals – next upward phase in ASX200 index

The ASX200 index generated a secondary technical buy signal yesterday. This signals the next upward move in the Australian market. The financials remains the stand out sector from a technical perspective, and is seen as the main potential driver for this further expected market rally. Significantly, in the financials sector, all four major banks are rated as technical buys (a positive momentum indicator), plus a number of asset management stocks and a large number of A-REITS. The earlier cluster of buy signals flagged this sector as having the potential to stage a rally (as highlighted in recent Wires). Despite the rebound off the recent lows, the resources sector is not (yet) showing any sign of a turnaround from a technical viewpoint.