middle finger monday, page-14

QBE down over -2% today - but still the only stock in the 20 Leaders above its 40-Day TMA.

Above is a Candle Stick chart for the XJO.

Summary of major indices In Australia today:

Twenty Leaders -1.4%
50 Leaders -1.4%
XJO -1.5%
XAO (All Ords) -1.5%
Small Ordinaries -2.8%
Financials (ex Property Trusts) -1.2%
Materials -3%
Consumer Staples -0.4%
Energy -3%
Health +1%
Telecoms -1%
Consumer Discretionary -0.8%
Utilities -1.4%

Comment: A strong down day. Volume was a little below average – but about square for a Monday. The up/down volume was the worst since 5 August, 2011. Despite the ordinary volume, that suggests capitulation. It could go on for a day or two – but we’re very close to a bottom – in the short term.
Technical Comment on the XJO (closed at 4669.1):
Major horizontal Resistance: 4891.4. Horizontal Support: 4550

Indicators

RSI9: 29.3. Oversold. Possible +ve divergence setting up
MACD Histogram. Marginally above zero. Neutral.
MACD: Below zero. Negative. Possible +ve divergence setting up
Stochastic: 22.1. Below its signal line but falling. Possible +ve divergence setting up
CCI.14: -120.5. Oversold. Possible +ve divergence setting up.

The low of 13 June is being tested. The chart is at the confluence of two oblique supports. That makes for a triple support. Good +ve divergences are setting up on indicators. Given the extremely poor up/down volume today, I’ll be surprised if there’s much more in this, in the short term. This is now set up for a strong bounce. But - you never know, we might have to wait for a 5/8/2011 event for this to be over.

Any rallies are likely to be sold into.



Redbacka