Postprandials, Thursday 28/4/2011

Today the ASX finished flat, up just 0.132 of a point.  It remains just under a significant horizontal support/resistance level and the 13-Day Moving Average.  Yesterday, the market hit a major horizontal resistance level and fell all day.  That's where the market finished today - after being up strongly in the early part of trade.  Today's candle is a "gravestone" candle inside the range of yesterday.

Other major indices today:

• XTL  (Twenty Leaders) +0.2%
• XFL (Fifty Leaders) +0.1%
• XFJ (Financials) +0.4%
• XMJ (Materials) -0.5%
• XSO (Small Ordinaries) -0.4%

The best performing Sector today was Information Technology +5.3%.  Information Technology is a very small sector and a major change in one component can affect the Index strongly.  Computer Share rose over 7% today after announcing the acquisition of an American company.

Amongst other sectors the standout was the Telecoms sector +1.6%.  (At the weekend for another forum I focussed on the out-performance of the Telecoms as a possible indicator of a turning market.)

Technical Comment on the ASX200 Market:

1. The Index is above 50-Day MA but below the 13-Day MA.  Neutral.
2. Indicators:
• Slow Stochastic 52.2 and above its signal line.  Positive
• The 13-Day MA is above the 50-Day MA.  Positive
• RSI above its mid-line, now 53.7.  Positive
• MACD Histogram below Zero.  Negative.  
• CCI +18.9 and falling.  Negative.
3. Volume was higher than yesterday in the All Ordinaries and the highest in the past seven days.  Given that today was an "upthrust" day which finished on its lows, that's a negative.

Today was Options Expiry day.  It's possible that the past two days (out of sync with movements in America) were part of OE shenanigans.  Possible.  The American market is, however, overbought and looking likely to consolidate or retrace.  So the Australian market may be anticipating that action.  Given that today was an inside day (sometimes considered a day of indecision), we might still have to wait on another day before coming to an opinion about likely direction.  But, at the moment, in my opinion, the odds are stacking up on the down side.

Finally - the 50 Leaders was up marginally today.  The tally for Advancers and Decliners was 15/32 with three flat.  This market was held up by a relatively small number of shares today.  That's another negative - a big one.

Cheers

Red