Australia 200 Forwards ($5 mini) Mar-09 TODAY Opinion: Technicians to the rescue Price: 3523 MONITOR Technical Points Resistance Major 2 3627 Minor 3602 Major 1 3577 Minor 3541 Gravitation 3504 Minor 3479 Major 1 3454 Minor 3418 Major 2 3381 Support Analysis: In Brief:
Overseas US markets finished slightly ahead, with the Dow snapping its six-session losing streak after bouncing from 8000 and rallying in late trade The Dow gained 12 points (+0.2%), the S&P500 advanced one point (+0.2%) and the Nasdaq closed 22 points higher (+1.5%) The UK continued its slide, now having managed only two positive days since the start of the year The FTSE 100 closed 60 points lower (-1.4%) Commodities Oil dipped below US$34 per barrel, following OPEC’s acknowledgement demand will be hit hard this year Oil finished at US$35.40 a barrel, down US$1.83 (-5%) Gold fell for a fourth straight session on increasing recessionary concerns Gold finished US$1.50 lower (-0.2%), closing at US$807.30 an ounce Base metals were mixed overnight with aluminium (-2.4%) and lead (+2.1%) the biggest movers Ex-pat stocks Aussie stocks were mixed on Thursday night BHP down 1.6% in the UK, up 3.2% in the US. RIO up 1.5% in the UK, up 4.1% in the US AQP down 6.3%, AWC up 4.3%, LGL up 6% Companies WPL – finds oil and gas in Libya, suspends OceanWay gas project in US due to falling energy prices PDN/SMM – Valhalla Uranium deposit increased by 18.5% Brokers AXA – downgraded to Neutral (from Outperform) by CS SHL – downgraded to Hold (from Buy) by Citi IOF – downgraded to Neutral (from Buy) by ML Technical traders look to have saved the day overnight, with the Dow bouncing 300 points from the crucial 8000 level.
We’ve discussed often just how powerful large, round numbers can be, and last’s night action showed how these kinds of levels can act as support and resistance.
However, we will need to see more evidence before we can believe that the overnight rally is the harbinger of more gains.
Therefore, we’ll maintain our short bias, and look at the overnight move as one more opportunity to get short from higher levels.
Likely Price Action: The SPI pushed down to 3440 and then counter-reacted back up to 3550 in overnight trading.
Quite a volatile overnight trading session leaves traders wondering what to expect in today’s end-of-week session.
We note key resistance at the 3571 (the swing point from yesterday) and again at the 365-hour moving average at 3630. Both of these levels are valid opportunities on the sell side.
We expect upward movement early on, followed by a resumption in selling pressure.
Intraday traders can work off 3571 and 3630.
Swing traders can set up orders around 3630 if they wish to join the short-term downtrend from a solid trend resistance point.
Therefore, we’d look to sell one Australia 200 Forward (mini) at 3629 limit, with stops 40 above, and targets 100 below entry.
This entry is valid until 4.25pm Friday.
In accordance with the ASR Capital Management Model, we will not be risking more than $200 by following the relevant trade specifications.
Members may enter this trade based upon the above criteria at their own discretion and we will track the progress of this trade in the Model Portfolio page of the report.
How ASR Would Structure This Trade Important Order Levels Type of Order Sell at Limit Stop Distance 40 Order Level 3629 G-Stop Suggested (Y/N) No Order Good Until 16/01/2009 Target Distance 100 ASR Trade Sizing Number of Contracts 1 Within ASR Cap Man Model? Yes Type of Contracts mini Risk amount ($) at stop $200.00
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