The XJO 5000 level is proving to be a stubborn obstacle to further gains of the Australian share-market at a time when the USA indices have forged new highs after the GFC.
After reaching 5250 in a previous thrust above 5000, the XJO developed the jitters at such a “heady” height, and went into a decline starting in the bogey month of May.
After a 38.2% retracement, the index found support at 4650, forming a double bottom, and has rallied steadily since.
Today buyers pushed the index higher to just reach the key 5000 resistance level before sellers took profits and lowered the index to a close at 4980.
The candlestick appearance for today’s trading can be perhaps called a “near” gravestone Doji, since the real body is not as small as usual. This appearance indicates trader indecision, and raises the spectre of a short-term trend reversal next week
The RSI however is at 60, and still short of overbought territory.
My expectation is for 5000 resistance to be tested again next week.
- Advance Declines Break Out to New Highs (ritholtz.com)
- Morning Technical Notes – July 12 (cmcmarkets.com.au)
- S&P500 closes at record high of 1675.07 (forexlive.com)
- China Customs says the trade data may reflect true picture after crackdown on speculative inflows (forexlive.com)