pick a broker - wednesday, page-14

Above is a Candle Stick Chart for the XJO.

50 Leaders +0.0%
XJO -0.0%
Materials -0.4%
Financials x-Property +0.4%
Small Ordinaries -0.0%
Health -1.9

Comment: Today was a narrow range doji candle. Volume was a little below average, but Brisbane was closed for a public holiday today, so volume, given that Brissie was out of the picture, was probably a bit higher than average. CBA and CSL both reported today. CBA was down solidly. -1.1% and CSL down -2.96%. CSL was down a lot more early in trading but recovered to finish about par with yesterday’s opening. Funny business. The dust needs to settle about CSL before its future direction becomes clear.
Technical Comment on the XJO (closed at 5157.4):
Horizontal Support: 5117.18 (-0.78%)
40-Day Moving Average: 4958.8.

Indicators

RSI9: 69.8. Close enough to overbought.
MACD Histogram. Marginally above zero. Neutral.
MACD: Above zero. Positive.
Stochastic: 94.3. Overbought.
CCI.14: +160.2. overbought.

The market is overbought. I thought that distribution was occurring during trading on Monday and Tuesday. Today’s narrow range doji on good volume continues that theme. Today – the buyers just didn’t have enough strength to carry this on higher. Of course, this could just be a pause. Bears need a big down. This can go on to test the May highs, but if it keeps going up to those levels, there won’t be much juice left in the tank.

The action in CBA looked bearish today:

The stock needs to break decisively below the swing point marked on the chart for the trend to change conclusively to the downside. That would give bears a significant double top. The Money Flow Index has a big negative divergence from the stocks chart suggesting that the stock was going up on a lot of hope and little substance. Let’s see how it goes.


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