The Australian market lost a lot of ground this week -4.69%, but...

The Australian market lost a lot of ground this week -4.69%, but bounced intra-day on Friday to finish up 0.2%.  It needs a strong day on Monday to confirm that Friday's intra-day bounce signals an end to this big pull-back.

Internal data is now so bad, that a bounce seems highly likely early in the coming week.  

The following large-cap stocks are above both their 50-Day EMA and their 200-Day EMA, with the 50-Day EMA also above the 200-Day EMA:  TPG, CCL, DMP, CPU, WHC, QBE, S32, Rio, BHP, NST.  (IOF is also in this category but distorted by a takeover offer - so it is discarded).  Look to those stocks for continued strength.

• XJO Charts, Daily, Weekly, Monthly.
• Internals – Australian Market.
• Copper
• Strongest and Weakest Sectors
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XJO Charts, Daily, Weekly.

XJO Daily:

Just over a week ago, the XJO tested the 50-Day EMA as resistance, then fell heavily.  Thursday was the biggest drop, down -2.74%.  Early on Friday, XJO continued to fall, then bounced back to finish up +0.2%.

Friday's action finished more or less at horizontal support/resistance.  

Short-term the XJO is extremely oversold with an RSI.14 well below 30.  A bounce back above 30 would be a short-term buy signal - but plenty of resistance remains overhead.  Any move to the upside should be slow going.

XJO Weekly:

XJO dropped -4.69% this week.  A quick check suggests that's the worst week since early 2016.

RSI below 40 is oversold.

Weekly XJO has broken marginally below the lower edge of the Standard Error Channel and sitting on support of the "cloud".  So there's a good chance of seeing a bounce here.

 

XJO Monthly:

XJO is into the second week of October.  It is down -5.02% so far this month.

Both the short-term Stochactic and RSI are on sell signals.

INTERNALS – AUSTRALIAN MARKET.

Internals were exceptionally weak this week.  The number of stocks in the ASX100 that are above their 200-Day MA fell from 53% the previous week to 29% this week.  That's  bearish,

Percent of ASX100 Stocks positive on the Directional Movement Index fell from 39.4% to 10%.  That's an oversold reading.  The % of ASX Stocks above their 50-Day EMA fell from 35.4% to 14.1%.  That's an oversold reading.  These internal readings are the worst going back on this chart to early 2017.  Expect a rebound in the XJO.  

 

None of the 11 Sectors was up this week.  Eight out of 11 Sectors were down >4%.  And one other sector was nudging the -4% mark.  Four Sectors (Information Technology, Tele Communications, Health and Energy) were down >6%.   The best sector was Consumer Discretionary -1.68%.   

Things are Crook in Tullarook.  But - I didn't have to tell you that.  

Look to buy if we get a bounce.

Copper Futures:

Copper is in a sideways consolidation above the old double bottom.  Such action usually implies a break to the upside.  This should bounce here, but still needs to get above the 200-Day EMA to prove bullish.

SECTOR CHARTS

XMJ:

XMJ was down heavily this week, down -4.02%, but rebounded off support on Friday, +1.17% to finish above its 200-Day EMA.   RSI is still in the do-not-buy zone, but close to giving a buy signal.  A rise above the lower band shown on the chart would give a buy signal.  Given events in America on Friday night, that looks like a foregone conclusion.

The two strongest stocks are both gold miners, NST and EVN.  NST is preferred.  After those, the next strongest stocks are S32, Rio and BHP.  

XEJ:

XEJ was down very heavily this week, -7.29% and, unlike XMJ, didn't rebound on Friday.  XEJ is on sell signals since 8 October.  Wait.

Whitehaven Coal is the strongest stock.

XIJ:

XIJ fell into correction territory on Thursday (down more than -10%), but rebounded strongly on Friday, up +2.44%, to finish down for the week -6.21%.  It only needs a little more upside to give a buy signal.

CPU is the pick of the XIJ stocks.  

XXJ:

XXJ is in an exponential move to the downside.  These often rebound sharply.  The hanging-man candle on Friday suggests that this fall might have finished.

XXJ has nineteen stocks in the large-cap ASX100.  Only four of those are out-performing the XJO: QBE, MFG, IFL and CGF.  QBE is by far the best performer.

XUJ:

XUJ (Utilities) fell -3.94% this week.  It remains below the "cloud" and below the 200-Day EMA.  This might rally but there are better opportunities elsewhere.

The strongest stocks are Ausnet and APA.

XDJ

XDJ has been in a pull-back since the end of August.  It has lost the support of the 200-Day EMA, but Friday's candle holds out some hope of a rebound.  Stochastics are giving a buy signal but I'd like to see a strong day on Monday before taking that signal.

XDJ was the strongest sector this week (relatively).  Strongest stocks are Domino's (DMP) and JBH.  I'm going to stick my neck out and make Domino's my stock of the week.  It was one of the few stocks in the ASX100 to record a rise this week, +4.2%.  This a good effort in an exceptionally poor week for the broad market.

XHJ:

XHJ fell again this week -6.08%, which is its worst performance for .....  years.  That came after a -5.59% fall back in early September.  That has brought XHJ back to its long-term support of the 200-Day EMA.  

The Bollinger Bands on the Stochastics have squeezed tightly together - which is usually a good sign that a move to the upside is close at hand.  Watch.

Look for a rebound in CSL which is sitting on its 200-Day EMA.

XNJ:

Like some other sectors XNJ has been in pull-back mode since the end of August.  Both Stochastics are now in the potential Buy zone but need a bounce to the upside to trigger the "Buy".  Watch for a break to the upside in those indicators for a contrarian play.

Strongest stock is Brambles (BXB).  

Out of 12 XNJ stocks in the ASX100, only two are out-performing the XJO.  Brambles is one, the other is ALX and it only just creeps above the Relative Strength line.

XSJ.

Like most of the XJO, XSJ fell heavily on Thursday, -3.03%.  It was down -4.47% for the week.

CCL is the strongest stock.  It is one of the few stocks in the ASX100 holding above its 50-Day EMA and the 200-Day EMA, and its 50-Day EMA is above the 200-Day EMA.

XTJ:

XTJ down -6.34% for the week, and it has lost the support of the 200-Day EMA and the 50-Day EMA.  The Index is on a sell signal.  But this could be a case of buy-the-dip.  Watch the short-term stochastic for a fall into the buy zone, then bounce above 20.

XTJ consists of only two large-cap stocks, Telstra and TPG.  TPG is preferred.  It is also one of the few stocks holding above both its 50-Day EMA and 200-Day EMA, while the 50-Day EMA is above the 200-Day EMA.

XPJ:

XPJ has been in pull-back mode since mid-September when it failed at horizontal resistance.

This week it fell below its 200-Day EMA and didn't bounce like some other sectors on Friday.

Strongest stock is IOF but IOF is under the influence of a take-over offer - leave that to the professionals.