ASX searching for direction

January 13, 2021 - 2 weeks ago
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Wall Street stocks turned positive having been lower earlier on Tuesday, though weakness in the shares of technology and social-media companies capped their gains.

At the finishing bell, on the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose +60 points, or +0.19%, to close at 31,068.69, after wobbling between small gains and losses throughout the day.

Shares of Goldman Sachs rose +2.9% to lead the Dow higher.

The broad-based Standard & Poor’s 500 Index eked out +1.58 points, or +0.04%, to 3,801.19, while the rich-tech Nasdaq Composite advanced +36 points, or +0.28%, to 13,072.43.

Facebook fell -2.2%, and Alphabet slid -1.1%. Microsoft and Apple also lost more than -1%.

All three indexes closed at record highs on Friday but retreated at the start of this week.

The ASX futures slipped -23 point, or -0.4%, to 6,594, while our local currency, the Australian dollar is currently buying US$0.7768 (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 highs or the near-term cap (resistance) at 6,755-65, now turns 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

On Tuesday, the Australian share market struggled to attract any bullish momentum.

The afternoon session quickly lost direction, as the market’s path becomes uncertain, as mining giants and tech stocks extend losses, while the major banks rose.

At the closing bell, the benchmark S&P/ASX 200 index lost -18.10 points, or -0.27%, to 6,679.08, while the All Ordinaries fell -20.40 points, or -0.29% to settle at 6,939.10.

Our major local miners got lost on the bullish path, with BHP leading the titans lower after falling -1.08% to $46.00, while Rio Tinto dropped -0.81% to $121.41, Fortescue Metals Group lost -0.32%, to $25.13 and Mineral Resources declined -1.52%, to $38.90.

Gold resources struggled to advance with Newcrest Mining falling -0.29%, to $27.59, Northern Star Resources lost -0.97%, to $13.31, Westgold slipped -2.92%, to $2.66.

Meanwhile, OZ Minerals dropped -3.85%, to $20.22, Saracen Minerals slid -0.21%, to $4.80, Ramelius Resources added +1.26%, to $1.61, Silver Lake Resources closed +0.57% higher to $1.75 and Evolution Mining Ltd lost -1.06%, to $4.67.

The Financial sector kept above the waterline with National Australia Bank rose leading the “Fab Four” (banks) higher by +1.08%, to $23.46, with Westpac Banking Corp adding +0.99, to $20.49, Commonwealth Bank climbed +0.85%, to $85.88, Australia and New Zealand Banking Group rose +0.84%, to $24.04 and Macquarie Group lost -0.87% and settled at $138.79.

As for our oil and gas producers, Woodside lost -0.55%, to $25.32, Oil Search lost -1.18%, to $4.18, Origin Energy fell -1.96%, to $5.01, AGL Energy declined -2.29%, to $11.95 and Santos climbed +0.42%, to $7.23.

Buy now, pay later Afterpay plummeted -1.88%, to $111.85, WiseTech rose +0.36%, to $27.84, Computershare added +0.14%, to $14.10, and Xero fell -2.33%, to $132.76.

Travel stocks struggled to keep above the waterline with Webjet falling -2.45%, to $4.78 and Flight Centre lost -0.99%, to $15.06.

Biotechnology giant CSL lost -1.04% to $273.07, while ResMed rose +0.14% to $28.36, Fisher & Paykel Healthcare dropped -1.36% to $29.74, while Cochlear lost -1.38% to $180.38 and Mesoblast added +1.56% to $2.60.

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