My observations below should be viewed as general advice
and may not be right for you.
Overnight
Market Snaphot
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US Indices began the session lower due to weakness in offshore trading. However, the major averages made their lows during the opening minutes and set off on a day-long climb towards the unchanged line. Due to weakness in Apple, the tech-heavy Nasdaq underperformed with a loss of 0.6%. Meanwhile, the S&P 500 shed 0.2%.
Utility stocks outperformed whilst the materials and energy sector came under pressure, losing
-0.68%
and -0.5% respectively. Steel stocks were the main drag after Citigroup downgraded
a pair of steelmakers, United States
Steel (-1.8%) and AK Steel
(-4.6%).
Traders
in Australia should note that Iron Ore sold off again, closing -2.5% to $103.70.
The S&P500 retested the low end of the range
overnight and held in. This market appears to be in a short term consolidation
pattern after the recent strong run up. The 1450 level remains key short term
support with breaks of this opening up a deeper pullback into 1430/1435. The
trend remains up and I continue to believe the market can grind higher into
month end to retest the 1475 highs and beyond.
Emini S&P500
15mins:
Short term consolidation and potential triangle pattern
forming.
Emini S&P500 December Key Levels:
Support Levels: 1445,
1430, 1415
Resistance Levels: 1465/1470,
1515
OZ Stockwatch
Eco Calendar:
11.30am AUS RBA Financial Stability Review
Corp Calendar:
BKL: Ex-Div 83c
Analyst Rating Changes:
AQP: London-listed raised to ‘Buy’ vs ‘Neutral’ at
Citi
BOQ: Cut to ‘Underweight’ at JP
Morgan
GBG: Cut to ’Underperform’ at RBC Capital
RIO: Cut to ‘Neutral’ vs ‘Buy’ at Citi
News:
ANZ:
Mike Smith, chief executive of Australia
and New Zealand Banking Group, yesterday said that Australia's
"defensive and suspicious" take on its relationship with China was
threatening much-needed investment from the Asian economic giant. "We have
to understand as Australians that capital goes where it's welcome we are in a
world where it's a scarce resource and we have to be more globally competitive.
We don't have a god-given right to inward investment. We need to make it
attractive," he said. (AFR)
FMG:
Loan facility “substantially” alleviates liquidity challenges according to
Moody’s. (Bloomberg)
Technical:
-Price/Vol scan and Bullish price action: AZH, BPT, KDR, MBN
-Price/Vol scan and Bearish price action: AGO, NCM, ORE, ORG, WPL
-Breakouts plays: AWC, AZH, AUT,
MBN, SFR
ASX200
and SPI Analysis
My observations below should be viewed as general advice
and may not be right for you.
My
SPI Range today: 4380 to 4420. Outlier levels 4355 support
and 4450 resistance.
My
SPI plan today: SPI futures closed at 4396 overnight after
hitting a low of 4382.
Yesterday my key short term 4400 level was broken and
this led to early weakness down to a low of 4380. The market appears to be
consolidating at the top end of the range after the recent strong run,
particularly in the resources stocks. There are certainly warning signs of a
deeper potential pullback but yesterdays lows of 4380 need to be breached and
this will open up a move into 4350 potentially.
Today I will be looking for early resistance around 4405
to 4410. Short term traders could look for a bearish turn out of this zone for
possible short setups. The target for
any weakness is down to yesterdays lows of 4380 which should be a meanginful
test. Only breakdowns through here would turn the short term trend into a new
possible downtrend. Traders could look to buy the 4380 area with tight stops
and if there is no meaningful bounce, join the new trend lower.
On the upside, any move above 4410 would be constructive
and open up a retest of the recent 4330 highs and possible beyond into the Daily
4450 level.
XJO 15mins:
Potential breakdown through this support zone. A break of
yesterdays lows at 4375 would confirm a deeper pullback.
SPI
15mins:
This is the early resistance zone I am looking at.
Traders could look for bearish reversals out of here early. Any failure to sell
early implies a retest of the recent highs and beyond.
Stock
Charts of Interest
Please feel free to contact me if you would like help or
assistance in interpreting the graphs below. You can also follow me o twitter
@FP_markets for live commentary throughout the day.
WPL Daily: Breakdown through support and possible topping
pattern.
On Friday, the stock opened strongly given the positive
bounce in Oil but made its high in the first 15minutes and trended lower for
the rest of the day. This is bearish price action. A breakdown through 34.00
could trigger this Head and Shoulders pattern.
ORG: Breakdown through support and confirmation of trend
lower.
BHP Daily: Strong base pattern and confirmed breakout
Breakout from a strong base pattern and retest of
support. This is a great low risk setup for those looking to join a possible
new trend higher. A risk would be on a close back below 33.00
NHC Daily: Breakout from base pattern.
Price broke out of this solid base pattern. There was a
retest of the neckline and support zone over the last 2 days which was
successfully held. If Price can hold above 4.35, this opens up a potential new
trend higher into 5.00
Australia’s dollar fell against its US peer yesterday as speculation slowing economic growth in China damped demand for higher-yielding assets. Indeed, China’s Economic Information Daily said
downward pressure on the Asian nation’s economy was increasing. However, overnights the battler retested the key 1.038 support area and bounced.
From a technical perspective, as long as the Australian Dollar can hold above the 1.0380/1.04 support zone in coming days, I believe there is potential for continued strength and a resumption of the uptrend. Confirmation will come on a breakout ABOVE 1.05 as I stated on Friday. The Kiwi also retested and held the key support zone at 0.8180/0.820 overnight.
AUDUSD 60mins:
These are the boundaries I continue to look at. The support zone was tested and held overnight.
NZDUSD 60mins:
The Kiwi remains one of the strongest pairs globally against the USD. Price is retesting the previous breakout zone and this offers a potential low risk entry into the trend.
If you would
like to chat live and interact daily with a Senior FP Markets trader, please go
to http://www.cfdtradersedge.com.au/. In his lives chat room
up to 50 full and part time active traders share market observations throughout
the trading day. This is an invaluable source for active ASX traders.
Contact:
Austin Mitchum. Senior Market Analyst
First Prudential Markets
Email: a.mitchum@fpmarkets.com.au
Office: +61 2 8252 6800 Ext 120
Mobile: +61 0431547026
Office: +61 2 8252 6800 Ext 120
Mobile: +61 0431547026
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