XJO (ASX) Indices 27/03

2/4/23. Weekend Report - The Week That Was. Week Ended 31/3/23.
XJO Monthly Chart.

The month of March finished with a flurry. After being solidly down for three weeks, the final week of the month brought a rally. XJO finished -1.11% for the month, but the long lower wick on this month's candle shows the extent of the rally in the past week.

The index finished above the 8-Month EMA. Supertrend remains bullish and Hull MA13 remains bullish.

Dynamic Zone Stochastic is on a "buy" signal from Dec. 22 and DZ RSI is on a "buy" signals from Nov. 22. (These signals are advisory only, and can give false signals.)

XJO Weekly Chart.

XJO finished the week above its 50-Week MA (equiv. to 250-Day MA), and has bounced off support at the 6900 level (round figures).

The last three candles are in a bullish configuration: big down week, doji, big up week.

This week, the chart finished marginally above the 8-Week EMA but remains below the Supertrend and Hull MA13 remains bearish. So, the market is not out of the woods yet.

DZ Stochastic still hasn't given a weekly "buy" signal. DZ RSI has given a "buy" signal this week, that follows its "sell" signal back in early February.

XJO Daily Chart.

This week, XJO is up every day of the week. It has finished above the 200-DMA and 8-DEMA. Supertrend is bullish and Hull MA13 is bullish.

Now for a cautionary note. DZ Stochastic and DZ RSI are both in over-bought conditions. A down-turn below the upper zones would be a short-term "sell" signal.

Monthly and Daily Charts are in sync (bullish). Weekly Chart is still a little hesitant with DZ Stochastic still not showing a "buy" signal, but DZ RSI is bullish.

Weekly Changes in Sectors.

All eleven sectors (plus Gold Miners) were positive this week. This week's rally was broad based.

Composite Bonds (a safe haven) saw it lose a little ground, down -0.39%.

Best sector, by far, was XMJ (Materials) up a massive +7.01%. XXJ (Financials), the largest sector in the market, was up strongly, +2.49%. The two weakest sectors (relatively) were XHJ (Health) +1.08% and XPJ (Property) +1.02%.

Sector Momentum.

The above chart shows Monthly, Weekly and Daily RSI's for eleven sectors plus Gold Miners and Composite Bonds.

All three columns sloping up - bullish trend. XDJ, XIJ, XTJ, XSJ, XNJ, XGD, IAF.
All three columns sloping down - bearish trend. XPJ
Down then up - counter trend bullish rally. XXJ, XMJ, XEJ, XHJ, XUJ.
Up then down - counter trend bearish rally. No sectors.

This is a picture of a very strong market with only one sector showing bearish momentum - Property.

All other sectors, plus Gold Miners and Composite Bonds (IAF) are either in a bullish trend or a bullish counter trend rally.

NewHighs-NewLows.

This is a long-term indicator, but a good guide for long-term investors.

NH-NL Cumulative started falling on 9 Feb. It has remained below its 10-Day MA since 13 February. On Friday, it had its first up day since 9 Feb.

Until this (blue line) gets back above its 10-Day MA , it's best for long-term investors to stay defensive.

A momentum chart for NewHighs-NewLows provides a more bullish picture:

This chart shows that the difference between New Highs and New Lows has been narrowing since 21 March. The 5-Day MA crosses above the 21-DMA on 22 March - which provides a "buy"signal.

X-Overs of the 5DMA of the 21DMA have provided good medium term "buy" and "sell" signals.

% of Stocks above key moving averages.

1. % of stocks above 10-Day Moving Average: Last Week 28%, This Week 77%.
2. % of stocks above 50-Day Moving Average, Last Week 29%, This Week 40%.
3. % of stocks above 200-Day Moving Average, Last Week 44%, This Week 50%.

Stocks above the 10-Day MA showed a solid improvement this week, it is now well into bullish territory.

Conclusion.

This week, the ASX was up breaking a series of seven down weeks in a row. This week's rise was emphatic and suggests a phase shift in the market from bearish to bullish.

Stay safe.