ASX 200 Technical Analysis Talking Points:
- The ASX continues to climb away from this year’s lows
- However, its dominant channel has not seen an upside test for quite a while
- Bulls need to prove their case
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The ASX 200 continues its bounce from the lows of 2018 and remains within the quite daily-chart uptrend channel which has bounded trade more or less since those lows were hit on November 20.
The channel was breached to the downside on an intraday basis back on November 30, but that was an unusual and indecisive session and the break looks spurious. You certainly get a quite well-respected channel if you screen it out.
However, to keep gains on track, bulls need to retake the previous significant peak in short order. That was the 5773, hit on November 28, which still stands as the last test of the channel’s upward bound. Since then market action has been more about defense of its lower levels.
The Sydney stock benchmark looks in need of some consolidation and base building before it can push on up to the previous November peaks which lie in the 5960s. The index will need to look very comfortable there before the bulls can even think of a retest of the psychologically crucial 6000 area. That doesn’t look likely from a fundamental perspective given the number of imponderables now dogging global markets, from US/China trade through to Brexit.
Still, that upside channel remains worth playing for the moment, although 2018’s lows at 5586 remain uncomfortably close and will probably beckon again if it gives way to the downside on a daily or weekly closing basis.
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