Wednesday, April 20, 2011

Postprandials, Wednesday 20/4/2011

The All Ordinaries Index (XAO) was up +1.37% and finished at 4859.  Today's move up was almost a mirror image of yesterday's move down.

Volume was below average.  Just  over 1billion shares traded - that's unusual outside the Xmas/NewYear period.  I thought this might be a pre-Easter effect - so I checked on last year's volume.  A similar fall off in volume did not occur then.  So this year's pullback in volume is a concern.  (The low volume on today's strong up move is in contrast to the American case, where last night's move was accompanied by very high volume.)

The Small Ordinaries was bullish +1.7%.    The Advance/Decline Ratio was also good 1.92:1.  

Today the market broke back above two important support levels:

  • the 50-day Moving Average
  • horizontal support at 4809.6
Technical comments today:
  • MACD Histogram remains below the Zero line.
  • RSI kicked above its mid-line at 53.2.
  • Stochastic (29.4) continued heading down but hasn't reached oversold levels below 20
  • CCi kicked up and finished at -12.5, still above oversold levels of -100. 
Today's market looks like a key reversal upwards.  Futures in America are currently looking very strong (Dow Industrials +85).  Rarely does a down day result when the futures are this strong.  It's still some time before the market opens in America - but those figures are unusually positive.

I think we saw a short-term bottom today - in the context of a longer term positive market.

Good luck
Red

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