The afternoon wrap

The afternoon wrap. The ASX 200 hit a low of 5122, just ten points shy of printing a technical 'correction'. However, buyers have come into the market, although pricing issues at the Sydney Futures Exchange (SFE) didn't help matters in afternoon trade. The buying centred on the resource space, with strong gains in some beaten up names like BHP, RIO and FMG - but clarity on earnings is still limited and thus this would be trading capital. Iron ore futures increasing by their daily limit helped, with talk today that a number of mines had not reopened after the Golden Week holiday. Another interesting space is the beaten-up energy sector. 25% of the ASX 200 is trading over two standard deviations from its 20-day moving average, but if I search for additional stocks whose 14-day RSI is under 25 and stochastics are at extreme lows, I get two in the ASX - WPL and STO. The combination of these could suggest mean reversion, and I look for a short-term bounce to potentially arise from grossly oversold conditions. (VIEW LINK)