The Australia 200 Index has traded sideways since last August. As Europe heads away from collapse, US data improves and monetary conditions remain easy, will the index break out through the topside? The levels to watch are
illustrated on the chart below:
Australia 200 Daily
In broad terms, the range is bounded by 3,970 and 4,365. This price action largely reflects the conflict between the “bottom up” strong fundamentals at the company level, and the “top down” concerns about the global environment.
If there is a break upwards, the first step will be a close above the recent highs around 4,365. To confirm the range is broken, a close above 4,420 is required.
Of course, there are no guarantees, and markets rarely move anywhere in a straight line. However, closes above the levels named above would suggest a better market performance in line with improving global fundamentals.