Australia 200 – Wednesday 8 July 2015
In the last week or so the ASX200 index has been able to find some much needed support around 5400 and rally strongly to back above 5600 before easing back a little to enjoy some further support at 5500. Earlier last week there was a strong reversal and sharp fall as the ASX200 index had resumed its medium term down trend and reached a five month low below 5400 in the process. Leading up to the sharp fall the ASX200 index has slowly but surely crept higher and reached a two week high above 5650 whilst enjoying solid support from 5500, however to finish last week it reversed strongly and resumed the medium term down trend. Throughout the last month or so it has fallen sharply a number of times yet enjoyed solid support from 5500, however this level has now given way.
In the second half of May the medium term down trend in the ASX 200 had reversed however just as quickly it has taken out the lows around 5550 and moved lower to its lowest levels in five months. The 5500 level has been solid in the last few weeks and provided reasonable support to the index however too much bearish sentiment broke through this level. A little higher up at 5800, this level remains large and continues to apply downwards pressure on the index, as this has been a significant level for the index throughout this year. It will be interesting to see whether the index can garner enough support from the short term support level around 5500 which has propped the index up over the last week or so.
Back in early May the Australia 200 index declined sharply from highs around the key 6000 level and whilst it paused a little around 5800 and enjoyed some support, it continued to decline down to a three month low around 5550. Even if it was able to rally higher and move back through the key 5800 level, the index will rejoin the congestion range between 5800 and 6000 and likely find it difficult to move through there quickly. Accordingly the 6000 level which was spoken about at length for most of this year is now a distant level and is probably some time away from being seen again.
(Daily chart below)
Australia 200 July 8 at 00:10 GMT 5547 H: 5574 L: 5455
Australia 200 Technical
During the early hours of the Asian trading session on Wednesday, the Australian 200 index is looking to continue its recent strong rally and remain above the 5500 level.
Further levels in both directions:
• Below: 5500 and 5400.
• Above: 5800 and 6000.
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