A brighter start for the ASX?

January 14, 2021 - 6 days ago
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The Australian share market is expected to open steady as Wall Street closed slightly higher on Wednesday, as investors waited for details of the next U.S. fiscal stimulus plan and Congress began President Donald Trump’s impeachment hearings.

In a historic vote, the House of Representatives on Wednesday made Donald Trump the first U.S. president ever to be impeached twice, formally charging him with inciting an insurrection just a week after a violent mob of his supporters stormed the Capitol.

It marked the first time in the 231-year history of the United States that a president has been impeached twice in his term.

The impeachment article, for “incitement of insurrection,” was adopted by the Democratic-controlled House, 232 to 197, after several hours of debate.

A group of 10 Republicans joined Democrats in voting to impeach Trump.

Trump will be tried in the Senate, which may not even convene until Jan. 19, one day before leaving office.

At the finishing bell, on the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell -8.22 points, or -0.03%, to 31,060.47, after fluctuating between small gains and losses throughout the day.

The broad-based Standard & Poor’s 500 Index rose +8.65 points, or +0.23%, to 3,809.84, while the rich-tech Nasdaq Composite advanced +56.52 points, or +0.43%, to 13,128.95.

The ASX futures rose +10 point, or +0.2%, to 6,625, while our local currency, the Australian dollar is currently buying US$0.7742 (as of writing).

Viewing the technical standpoint, the Relative Strength Index (RSI) 3-day ‘lookback’ indicator is currently beneath the 50-midway point, which in terms supports a weak negative signal.

Meanwhile, the Moving Average Convergence Divergence (MACD) hesitates to tackle the 0.00 axis; however, a break to the upside would support a positive signal.

The Average Directional Movement Index (ADX) trend indicator is ranging.
Developed by J. Welles Wilder, the Relative Strength Index (RSI) is an extremely popular momentum indicator (oscillator) that measures the speed and change of price movements.

RSI oscillates between zero and 100.

According to Wilder, (depending on the period setting), the RSI is considered overbought when above 90 and oversold when below 10.

Signals can also be generated by looking for divergences, failure swings and centerline crossovers.

RSI can also be used to identify the general trend.

Gerald Appel developed the (MACD) technical indicator back in 1979, while in 1986, Thomas Aspray added the histogram.

The MACD is a tool used to identify moving averages that indicate a new trend, whether bullish or bearish.

(MACD) plots the distance between moving averages and helps traders identify trend direction and whether the bullish or bearish momentum in the price is strengthening or weakening.

Due to the (XJO) retreating from the 7-week high or the near-term cap (resistance) at 6,755-65, now shifts the attention on the minor support at 6,645.

A potential base is located at 6,580-90, which expects a bullish response if challenged.

Daily outlook on the benchmark S&P/ASX 200

The Australian share market ended the Wednesday session marginally higher, as energy stocks climbed to their most substantial level since March as oil rose for a seventh consecutive day after an industry report showed a further drop in inventories.

At the closing bell, the benchmark S&P/ASX 200 index eked out +7.50 points, or +0.11%, to 6,686.60, while the All Ordinaries rose +14.80 points, or +0.21% to settle at 6,953.90.

Oil Search rose +6.2%, to $4.44, Woodside Petroleum surged +5.4%, to $26.68, Santos added +3.9%, to $7.51, Origin Energy climbed +3%, to $5.16 and Beach Energy gained +4.2%, to $2.00.

Our major local miners managed to get back on the bullish path (except for Rio), with BHP leading the titans higher after rising +0.48% to $46.00, while Fortescue Metals Group added +0.16%, to $25.17, South32 rose +3.8%, to $2.71, Mineral Resources eked out +0.05%, to $38.90; meanwhile, Rio Tinto dropped -0.55% to $120.74.

The Financial sector once again just kept above the waterline with Westpac Banking Corp leading the “Fab Four” (banks) higher by +0.54%, to $20.60, with Australia and New Zealand Banking Group adding +0.46%, to $24.16, Commonwealth Bank gained +0.1%, to $85.97, National Australia Bank eked out +0.09%, to $23.48 and Macquarie Group fell -1.32% and settled at $136.96.

Retailers were firmer with Kogan.com climbing +3.5%, to $20.32, Super Retail Group rose +3.7%, to $11.99, and Harvey Norman added +4.2%, to $5.20.

Biotechnology giant CSL lost -0.74% to $271.04, while ResMed fell -1.62% to $27.70, Fisher & Paykel Healthcare rose +0.13% to $29.78, while Cochlear gained +0.17% to $180.69, while Mesoblast plummeted -6.15% to $2.44.
Woolworths declined -1.5%, to $39.31, while rival Coles Group dipped -2.4%, to $17.96.

Transurban slid -1.7%, to $12.73, Goodman Group dropped -1.6%, to $17.62.
Iluka Resources climbed +4.7%, to $6.91 after Goldman Sachs increased its price target by 22 per cent, saying the construction of a rare earths refinery would lift the value of Iluka’s Eneabba and Wimmera projects to about $1.2 billion.

Buy now, pay later Afterpay plummeted -1.42%, to $110.26, WiseTech rose +0.14%, to $27.88, Computershare ended flat at $14.10, Xero fell -1.36%, to $130.96.

Property stocks also came under fire with Growthpoint Properties falling -2.13%, to $3.21, Mirvac Group lost -1.6%, to $2.50 and Lendlease slid -2.9%, to $12.90.

Travel stocks kept above the waterline with Webjet rising +0.84%, to $4.82 and Flight Centre added +0.73%, to $15.17.

In economic data release, according to the Bureau of Statistics (ABS), the number of job vacancies in Australia surged to 254,000 in the November quarter, in the latest sign that Australia’s economy is recovering quickly from COVID-19.

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