Technical Analysis AU200 : 2021-07-08

[IFC Markets]

Recommendation for ASX 200 Index: Buy​

Buy Stop : Above 7380.37

Stop Loss : Below 7223.06





RSI : Neutral

MACD : Buy

Donchian Channel : Buy

MA(200) : Buy

Fractals : Neutral

Parabolic SAR : Buy

Chart Analysis​

The AU200 technical analysis of the price chart on daily timeframe shows AU200,Daily is attempting to rebound after pullback following a record close in mid-June. It has rallied above the 200-day moving average MA(200) which is rising itself. We believe the bullish momentum will continue after the price breaches above the upper Donchian boundary at 7380.37. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below 7223.06. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop-loss level (7223.06) without reaching the order (7380.37) we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Fundamental Analysis​

Australia’s private sector activity expansion continued in June. Will the AU200 advance continue? Australia’s economic data in the last couple of weeks were positive on balance: trade surplus rose in May, private sector expansion continued in June albeit at lower pace, and while the construction activity slowed in June it still continued to expand. Thus Australia's trade surplus increased to a record high of A$9.68 billion in May from an upwardly revised A$8.16 billion in the previous month. Markit Australia Composite PMI was at 56.7 in June, compared with the 58.0 in the previous month, with both the manufacturing and service sectors recording slower output growth. And the Australian Industry Group (Ai Group) reported its Australian Performance of Construction Index declined to 55.2 in June from 58.3 in May. Readings above 50.0 indicate industry expansion, below indicate contraction; Positive Australian economic data are bullish for AU200.