The XJO is under the influence of reporting season. So far stocks have generally been performing well and the XJO was up +0.97%. Weakness in Materials and Energy has put a cap on prices.
This week I've gone back to my old practice of including Charts for each of the eleven ASX sectors and highlighted stocks which have performed well as a result of their earnings reports. Some of the old "Dogs" are now happily wagging their tails.
XJO Charts, Daily, Weekly, Monthly.
Internals – Australian Market.
Copper
Sector Charts
XJO Charts, Daily, Weekly.
XJO Daily:
XJO had been in a directionless trading range for about six weeks. On Wednesday it broke above horizontal resistance at 6300. It is now about 39 points above the old resistance level. That's not much of a buffer, but the trends are up. Stay with the trend.
XJO Weekly:
XJO was up this week +0.97%.
This chart clearly show that the medium-term and long-term trends are up.
The weekly chart is close to the top of the Standard Error Channel. More upside could occur, but some sort of pull-back or consolidation in the near future is likely.
XJO Monthly:
The monthly chart is in an up-trending channel since early 2016. In the long-term, the XJO looks likely to test the 2007 high by the end of the year. Buy dips.
The trends on all three time scales are in sync.
INTERNALS – AUSTRALIAN MARKET.
The number of stocks in the ASX100 that are above their 200-Day MA is this week, 73% in the previous week, 75% this week. This keeps the Index solidly in bullish territory, and rising steadily.
Percent of ASX100 Stocks positive on the Directional Movement Index was unchanged at 67.7%. If this figure gets above 80%, it might be time to take some defensive action.
Nine out of 11 Sectors were up this week. The worst result was in the Materials Sector -3.25%. XMJ is below its 200-Day EMA and the only sector negative (-3.97%) for the past 12 weeks.
The best performing sector was XTJ (Telecoms) up +7.48%. XTJ has been the Dog of our market. The worst may now be behind it. I'd still like to see it above its 200-Day EMA before becoming too confident.
Here's the Weekly Change chart:
We can see clearly here that Resources were the biggest drag on the market.
To put that into some context, here's Sector Changes on a 12-Week basis:
Health has consistently been a top performer. XTJ is now the fourth best performer in the past 12 weeks, up ~7%.
Copper Futures:
Copper Futures are now in bear market territory, down more than -20% since the high in early June
Any rally is likely to be sold into. Not a great sign for our miners.
Copper is often taken as a proxy for world economic health.
Sector Charts:
XUJ
XUJ was up +3.24% for the week. It is in a range between 7900 and 8125 (rough figures). A break above horizontal resistance would be positive.
Strongest stock is APA.
XMJ
The recent bearish fall is clearly evident in this chart. XMJ is now sitting below the 200-Day EMA but holding at nearby horizontal support, so there is some hope for the index. Until we see signs of definite improvement, it is best to be cautious about XMJ.
There's little to get excited about in XMJ. The only stock showing positive on the 52-Day Relative Strength Index is Incitec Pivot. The only stocks above their respective 200-Day EMAs are ABC, AWC, BHP, BSL, DLX, IPL, JHX, NST, ORA. That's nine out of twenty large cap stocks in the ASX100.
XDJ:
XDJ was up +1.01% this week, more or less in line with the broad market index, XJO.
JBH and NHV have both reacted positively to their earnings reports. Both are now overbought. Look to buy the dips.
DMP disappointed on the day of its earnings report, but has since surged higher. Buy the dips.
XTJ:
XTJ rose after a good reaction to Telstra's report. There are only two Telecom stocks in the ASX100, Telstra and TPG. TPG is now above its 200-Day EMA. Look to buy either on dips, but TPG is the preferred stock (Stock ticker TPM).
XIJ:
LNK reported on Friday and bolted higher +6.32%. It is now above its 200-Day EMA.
CPU reported on Wednesday and rose +3.46% after an initial fall.
Look to buy dips in those stocks.
XEJ:
XEJ down -0.78% for the week.
It is now down to the 50-Day EMA and bounced on Thursday off that support level, so it could be OK. Look for confirmation of a rebound.
XHJ:
XHJ is consistently the best performing sector in the XJO. This week it was up 4.27% after a big rise on Wednesday.
Best performing stock is CSL. On Wednesday it was up >6% after its report. Look to buy dips.
XSJ:
XSJ broke above horizontal resistance on Wednesday when it was up +1.66%. That was largely due to a big rise in Wesfarmers +3.18%. It is the strongest stock in the Sector.
XNJ:
XNJ is in a steady uptrend, up this week +1.32%.
ALQ had a strong day on Wednesday after its report, up +12.24%. It's the strongest stock in the sector; buy the dips.
XXJ:
XXJ is up +1.22% this week.
Three out of the four big banks are now above their 200-Day EMAs. The only laggard is CBA. ANZ is the strongest. If you must have a bank - it looks the best of them.
QBE was the big movers this week, up +6.76% on Thursday after its report. The worst now seems to be behind QBE. Buy the dips.
Magellan (MFG) reported the previous week when it rose +14.33% on 9 August. It then dipped and now rebounded on Friday. This looks like a buying opportunity.
XPJ:
XPJ continues to perform well, up this week +1.47%
GMG (Goodman) reported on Friday and rose +5.25%. Buy dips.
(20min delay)