Australia 200 Kicks Heads

The Australian share market has kicked me in the head again. I’ve been calling for a short term pullback to the 4,700 region, but the strength overnight and today has delivered another lesson in humility. More importantly, the risk in the Australia 200 index shifts to the upside.

Here’s the price action:

Australia 200 – Daily

20130424 xjo

Not only did the market break the resistance at 5,025, the MACD has crossed, turning positive. This suggests the possibility of a test of the highs at 5,165. I’m looking at the following trade:

20130424 xjo tkt

About michaelmccarthycmc

Chief Market Strategist - CMC Markets and Stockbroking Regular on ABC, BBC, Bloomberg, Channel TEN, CNBC, SBS and SKY
This entry was posted in Market, Shares, Stocks, Trading and tagged , , , , . Bookmark the permalink.

4 Responses to Australia 200 Kicks Heads

  1. dealar says:

    Thanks a lot for the post Michael

    It’s not quite one – but has some of the characteristics of an inverse head and shoulders too.

    As one of the world’s great frontmen suggested – ‘Sometimes you kick; Sometimes you get kicked’.

  2. John says:

    Following Wed close, there are only 30% of stocks with a daily vol greater than 20,000 above a 40 day SMA. This reduces to 22% where the SMA is higher than what it was 20 days ago.

    The results for a 200 day SMA are 37% and 33% respectively.

    The index does not represent the true picture of the market.

    • Hi John – thanks for your analysis. I’m interested to know how many stocks of the more than 2,700 listed on the ASX have daily turnover greater tahn 20k.

      Not sure I can agree with your conclusion. Its true that the index is not “democratic” – larger companies have more impact than smaller ones. However, as we are in an investment universe, I believe this is appropriate.

      Also, as a former manager of traders, I’m very wary whenever a trader tells me that in one way or another “the market is wrong”. In my view, the market is ALWAYS right, no matter how illogical the market may seem

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