Finspiration Australia. Chart Analysis for Australian and International Stock Markets

   8/1/23.  Weekend Report - The Week That Was.  Week Ended 6/1/23.

 Chart Analysis on this Blog is purely descriptive.  It is written for informational and educational purposes and should not be taken as financial advice.  Do your own research or seek advice from a Registered Financial Advisor.

ASX was up this week after being down for the fourth week in a row - not a great December, historically the best month of the year.  

XJO Monthly Chart.

The first week of the new month of January, 2023 has been good for the XJO. up +1.01.   The Index is above the 8-MEMA, Hull MA13, 50-MMA, 200MMA.  The only resistance is the Supertrend (7/1.5).  

RSI is at 52.79.

It's still early in the month so no decisions should be made on the basis of this chart.

XJO Weekly Chart.

                                            

In the past five days, XJO risen +1.01%.  That terminated four weeks down in a row.

This week's candle looks bullish - with a long lower tail and the body of the candle completely engulfing the previous week's candle.

The Index bounced off both the 50-Week MA and the Supertrend (7/1.5).  It also finished above the 8-Week EMA.  If the Hull MA13 turns up (it is currently trending down) that would reinforce the bullish status of this chart.

Weekly RSI is at 53.7.  That's above the Monthly RSI of 52.79, which suggests a bullish XJO.

XJO Daily Chart.

Early in the week, XJO fell below the important 200-DMA, it quickly bounced back above the 200-Day MA.

For those familiar with "Order Block" Theory, an Order Block existed back on 18 Nov. 2022.  The action this week looks like an effort by big players to "mitigate" that order block and revert to the upside.  Expect more upside.  

Daily RSI is at 50.16.  A move by Daily RSI above Weekly RSI of 53.7 would be another bullish indicator.  It wouldn't take much for a move like that to happen.

Monthly, Weekly and Daily RSIs.

The above column chart shows the Monthly, Weekly and Daily RSIs for each sector.  This can provide information about bullish sectors and sectors to watch (might turn bullish).  This can be used as an initial filter before making stock selections.

Bullish Sectors:  slope upwards from left to right.

Bearish Sectors:  slope downwards from left to right.

Sectors to Watch.  First two columns slop upwards, third column is below second column.

Bullish Sectors:  Only one:  Materials (XMJ).  The Gold Miners Industry Group (part of XMJ) is also bullish.

Bearish Sectors:  XXJ, XEJ, XTJ, XHJ, XSJ, XUJ, XNJ.

Sectors to Watch (could turn bullish):  Only one - Property (XPJ).

XJO is also on the "watch" list.  Weekly RSI is above Monthly RSI, but Daily RSI is below Weekly RSI.  It wouldn't take much for XJO to turn bullish.

IAF (Composite Bond Fund) is also in the "Watch" Category.  It has been in a long-term down-trend with a Monthly RSI of 33.54, but the Weekly RSI 45.61is showing strength.  Daily RSI is at 44.08, so it wouldn't take much for Daily RSI to rise above Weekly RSI.

Bullish Stocks in XMJ are:  AWC, BHP, BLD, BSL, Gold, EVN, FMG, NCM, NST, OZL, RIO, S32.

Note that apart from Boral (BLD) all are miners or mining related (Gold).

These are not recommendations - check the daily charts and see if they are suitable for "buying" - or seek the advice of a qualified financial adviser.

NewHighs-NewLows Cumulative.

Early in December, NH-NL Cum briefly rose above the 10-Day MA but then fell.  It is currently rising again but still below its 10-Day MA.  This week we had three days when New Highs were greater than New Lows.  It wouldn't take much now to flip this into a bullish framework.

This is a lagging indicator but bullish signals are usually highly reliable.  At this stage, this chart is suggesting that long-term investors watch this market carefully.

I've developed another long-term metric "StrongStocks-WeakStocks" which is similar to NH-NL but gives signals a little earlier than NH-NL.SS-WS is up for the eighth week in a row and has moved well above its 5-Week MA.   This week there were 12 Strong Stocks and 6 Weak Stocks.  

The SS-SW line has once again kick up from the 5-Week MA.  This remains bullish.

% of Stocks above key moving averages.

1.  % of stocks above 10-Day Moving Average: Last Week 35%, This Week 46%.  

2.  % of stocks above 50-Day Moving Average, Last Week 42%, This Week 46%.  

3.  % of stocks above 200-Day Moving Average, Last Week 41%, This Week 41%.  

Incremental improvement has occurred in the short term and medium term readings.  All three readings remain under 50 - the bearish level.

Conclusion.

 

January has started well for the XJO but the only Sector with clear Bullish credentials is the Materials (XMJ)

XJO has bounced strongly off the 200-Day MA.  More upside would turn the broad market Index into a bullish configuration

America and Europe were both up strongly on Friday night.  So we could see the XJO flip into the bullish category in the coming week.

Stay Safe.