XJO (ASX) 09/01

Originally posted by redbacka: ↑

15/1/23. Weekend Report - The Week That Was. Week Ended 13/1/23.
Chart Analysis on this Blog is purely descriptive. It is written for informational and educational purposes and should not be taken as financial advice. Do your own research or seek advice from a Registered Financial Advisor.

This week was a bonanza for the Dart Throwers. No matter where the dart fell on the list of ASX 200 stocks - you probably picked a
winner.
XJO Monthly Chart.

The first two weeks of the new month of January, 2023 have been good for the XJO, up + 4.11. The Index is above the 8-MEMA, Hull MA13, 50-MMA, 200MMA. The only resistances are the Supertrend (7/1.5) and horizontal resistance.

Monthly RSI is at 55.55

It's still early in the month so no decisions should be made on the basis of this chart.

XJO Weekly Chart.

In the past five days, XJO risen +3.07%. The bullish candle from the first week of January has seen follow through buying in the second week.

The Index bounced off both the 50-Week MA and the Supertrend (7/1.5). It also finished well above the 8-Week EMA. Hull MA13 is flat. A move higher would give a medium term buy signal.

Weekly RSI is at 60.42. That's above the Monthly RSI of 55.55, which suggests a bullish XJO.

XJO Daily Chart.

XJO has been up for seven of the past eight days. This has been a short-covering rally precipitated by the big bullish candle on 4 January, which completely reversed the big bearish candle on 3 January. That trapped a lot of short traders now scrambling to get out of trouble.

Daily RSI is at 64.02. Daily RSI is above the Weekly RSI (60.42) which is above the Monthly RSI (55.55). That's a bullish configuration.

XJO is now at horizontal resistance after a strong run-up, which suggests we might see a rest or a pull-back here.

Monthly, Weekly and Daily RSIs. - Sectors + XJO + Gold + Composite Bonds

The above column chart shows the Monthly, Weekly and Daily RSIs for each sector. This can provide information about bullish sectors and sectors to watch (might turn bullish). This can be used as an initial filter before making stock selections.

Bullish Sectors: slope upwards from left to right.
Bearish Sectors: slope downwards from left to right.
Sectors to Watch. First two columns slop upwards, third column is below second column.

Last Week, only one sector was bullish - XMJ (Materials). Gold Miners Industry Group (part of XMJ) was also bullish.

This week we have a slew of bullish readings: XXJ, XMJ, XDJ, XIJ, XTJ, XPJ, XNJ, XGD, XJO, IAF

Bearish readings: XEJ, XHJ. XSJ is bearish in the medium to long-term but showing a short-term bounce.

I have no sectors on a bullish "watch list".

XMJ is short-term overbought with an RSI >70. Expect consolidation or a pull-back in the coming week.

NewHighs-NewLows Cumulative.

This is a long-term lagging indicator.

This is the first time since early 2022 that NH-NL Cum has risen above the 20-Day MA (blue dotted line). That's a bullish event. While the NH-NL Cum stays above the 10-Day MA long term investors can feel more comfortable with their investments.

I've developed another long-term metric "StrongStocks-WeakStocks" which is similar to NH-NL but gives signals a little earlier than NH-NL SS-WS is up for the ninth week in a row and has moved well above its 5-Week MA. This week there were 33 Strong Stocks and 2 Weak Stocks. That's the best result since I began keeping records two years ago.

The SS-SW line has once again kicked up from the 5-Week MA. This remains bullish.

% of Stocks above key moving averages.

1. % of stocks above 10-Day Moving Average: Last Week 46%, This Week 78%.
2. % of stocks above 50-Day Moving Average, Last Week 46%, This Week 70%.
3. % of stocks above 200-Day Moving Average, Last Week 41%, This Week 52%.

All three indicators are now bullish. The short term indicator (stocks above 10DMA) is now pushing up near to an overbought reading of 80%. Any more improvement could see a pull-back.

Conclusion.

January has started well for the XJO and many Sectors are now giving bullish readings.

The move up in the second week of January has been very strong - perhaps a little too strong. Any more upside improvement is likely to be followed by a downside movement. At this stage, it seems that any dip will be bought.

XMJ has been the strongest sector with a short-term RSI >70. With such strength, I'd expect a pull-back in XMJ in the coming week. That could flow over into the broad market.

Stay Safe.

Expand

Again, a massive thank you for your continuing analysis.

Many of us spend our energies under magnifying glasses in sectors in which we trade/ invest every day, and often zone out of the big picture.

Your regular posts always provides the holistic views of the market in general, and I look forward to reading them when posted.

They add so much more of a macro outlook, with indicators used that I especially have little familiarity with, but are extremely informative.

A generalised bullish outlook for a change is refreshing, and the buy the dips mentality now , likely carries even more weight into the future.

All the best...