We are down approx. 1% by the close of the trading week with XAO after the impulse move of last week. Since late August, XAO is stuck in a trading range of 450 points with boundaries as marked on the chart. It is the zone where the down trend line and the horizontal resistance line which would spell a fresh bull run if and when overcome to the upside. On the downside our August low which is @ 4936 exact still holds and it is a medium term support which we want to see hold. I have marked that level as 4950 Approx..
We have the RBA meeting on Tuesday which is likely to provide further direction as to which way we may be headed. If we see a rate cut on Tuesday, that may well be the catalyst for a breakout in our market to the upside. Also in mid. December is the US FOMC meeting, deciding the faith of the interest rates in the US which is also worth watching.
Consumer discretionary sector XDJ, within XAO ( All Ords), is also a in the process of completing a BULLISH HEAD & SHOULDERS BOTTOM pattern ( yet to be confirmed) which should also help our broader market. It may well be that XDJ is smelling some sort of a rate cut on Tuesday, which may well be the trigger to complete it’s bullish basing pattern of H&S BOTTOM. Chart of XDJ not shown.
Over the next few weeks energy sector would also be examined, before the next anticipated bullish seasonality starts.
Thanks for tuning in and enjoy your weekend.
Weekly XAO Chart below.
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