Weekend Charting & Chat, page-37

Weekly Wrap. Week ended 9/10/20. Rising tide lifts all boats (almost)

XJO Daily Ichimoku Chart:

XJO had a very strong week +5.36%. Every aspect of the Ichimoku Chart is bullish.

The chart still has one main obstacle to overcome - nearby horizontal resistance which has stymied the upside move on several occasions since early June

Breadth.

Breadth improved this week.

ASX100 Stocks above the 200-Day MA rose from 31% to 41% this week.

Stocks above the 50-Day MA rose from 33% to 59% this week, while stocks above the 10-Day MA rose from 25% to 96% this week. (Rising tide lifts all boats, almost.) That last figure is an extreme number and might suggest we're in need of a pull-back, but other breadth numbers are moderately bullish. So any pull-back is likely to be bought.

NewHighs-NewLows Cumulative.

NH-NL Cumulative remains above its 10-Day Moving Average. A fall below the 10-DMA should be taken seriously. Such an event occurred back in late February this year and began the big fall in February-March.

Stocks/Bonds Ratio:

XJO is outperforming Bonds for the first time since early September. That suggests a risk-on attitude to the market is required.

Weekly Performance of Sectors:

All eleven sectors have been positive over the past week.

This week, Energy (XEJ) was the best performer. It tends to be volatile and not a lot can be read into one week's reading. The next two best performers were Information Technology (XIJ) and Financials (XXJ),

The worst performers (relatively) were all defensives: Utilities +2.02%, Telecoms +3.03%, Consumer Staples +3.74% and Property+2.54%.

Strong Stocks in the ASX100:

Here's a list of relatively strong stocks in the ASX100:

Utilities: AST*.

Industrials: RWC*, ALL, ALQ, CWY, SEK

Materials: AMC, BSL, BLD*, JHX, NST

Financials: BOQ, MFG*, MQG.

Property: CHC*, GMG. SCG, SGP

Health: ANN, COH, RHC, SHL*

Information Technology: ALU, APT, CAR, XRO*

Consumer Staples: CCL*

Energy: WOR, SOL*

Consumer Discretionary: DMP, REA, SGR*

Telecommunications: No Entries

I use a set of six criteria to test each stock. The stocks chosen are positive on all six criteria.

Last week seven stocks met all criteria. This week 32 stocks meet all criteria.

*The strongest stock in each sector is marked with an Asterisk.

These are not recommendations - but a filtered selection which might be worthy of further investigation by medium-term traders.

Large-Cap Stocks with Low Volatility

Last week AST was the only choice. There's no reason to sell it at this stage. It has been a pick for the past three weeks and is up +6.45% in that time.

ETFs:

The best three ETFs are VAP, VSO and ATEC. VAP has been a pick for the past four weeks, up a total +5.21% while the XJO was up +4.14% in the past Four weeks. VAP is an ETF tracking the XPJ (Property) Sector. VSO tracks the small ordinaries and ATEC tracks Information Technology.

IAF was pick for the past two weeks but disappointed last week. It drops out of the selection. IAF is best when the market is bearish.

If you read Saturday's edition of the report, you will remember my concerns coming into the next week. The bull run might continue, but there are factors coming into play which suggest the possibility of a short-term pull-back. Watch the charts.

Good luck with your investments in the coming week.