The week ended at 4336.8, a fall of 130.9 points or 2.81%, after the 4450 support level was breached.
Apprehension over the approaching US so-called “fiscal-cliff” has been the dominant investor anxiety this week, but somewhat violent demonstrations against government austerity measures in Greece and Spain has reminded the world how precarious is their cooperation.
Sellers have been in the ascendancy all week, and although the RSI indicator has dropped to 30, and the over-sold range, there would seem to be every possibility of further fall. The next support level on the daily chart is at 4275, and could be a target for next week. The weekly chart suggests that the next firm support level is at 4000.
Retail investors are now faced with returns of only 3 or 4% on their term deposits, barely enough to clear inflation. The stock-market however provides substantially higher return from dividends with a bonus of franking credits, and the possibility of growth. With many stocks over-sold, it is likely that further falls will attract bargain hunting buyers back into the market.
Categories: Trading opinion