redbacka's - what does that tell us - thursday, page-40

In Australia:

Twenty Leaders +1.3%
50 Leaders +1.2%
XJO +1.1%
Small Ordinaries +0.9%
Financials +1.3%
Materials +0.5%
Consumer Staples +2.4%

Comment: A very strong up day on above average volume (113% of the 20-Day Average). Breadth is suspect with the XTL (20 leaders) the strongest of the four broad market indices. The %age increases cascade down the more the breadth widens. Market structure is suspect with Materials much weaker than Consumer Staples, the best performing index.

Technical Comment on the ASX200:
The XJO finished at 4330.2. Resistance at 4437.4 (in the heavens). Support at 4245.9.
Indicators:
Stochastic: 84.8. Overbought, once again. Above both its signal line and the overbought level of 80. Caution.
RSI: 68.4. Once again nudging up towards the overbought level of 70.
MACD Histogram. Below zero. Negative. But turning up.
MACD: Above zero. Positive.
CCI: +89.2. Below +100. Negative divergence.

The medium term trend is up. The short term trend is up.

The 10-Day EMA is a above the 20-Day EMA. Positive.

Today’s very large move morphed the short term pattern into a bull flag. Of some importance is the break by the Index above the down trend line in place from early May, 2012. That’s positive. But the old adage remains – both oblique and horizontal resistance must be broken. Intra-day high five days ago was 4330.4. The intra-day high today was 4330.2 – so, no cigar.

On the face of it, it is looking promising. Plenty of termites working away. Market structure over the past three days has favoured the defensives. We’re overbought by several measures. CCI is showing a definite negative divergence.

I must admit to being a cynic at these levels.

Here’s a snapshot from Trading Room of the biggest movers on the ASX today (negative and positive). http://www.tradingroom.com.au/apps/mkt/movers.ac

Where are the Big Banks and the Big Miners? Today was an odd day.


Redbacka