ASX200; The Long And Short Of It

  • Consumer stocks (staples and discretionary) are the leaders the past 5 sessions and trade just off their record highs.
  • All sectors remain in positive territory the past 52-weeks
  • However, its been the worst two sessions for the ASX200 since the first week of October and the week is on track for a bearish outside candle. Given this occurred after failing to hold above resistance warns there could be further downside as the bull-trap plays out.

Nanosonic CFD/DFT (NAN)(NNCSF): This healthcare stock remains in tip-top shape and trade just beneath its record highs. Since the prior analysis, the Doji marked a higher low ahead of its run towards (and break to) record highs.

Price action is now coiling above key support and holding above the 10-day eMA, to show momentum remains strong overall.

  • The bias is for a bullish break out of compression and for prior resistance around 7.10/16 to hold as support.
  • However, we could also look for the bullish trendline to act as support if a deeper retracement materializes.
  • As we’re at a record high, an open upside target could be considered. Alternatively, bulls could target the monthly R and R3 pivot levels around 7.85 and 8.50 respectively (keep in mind thee levels will be revised from December).
  • Conversely, a break of the bullish trendline could provide bears with a countertrend move towards 6.50.

Galaxy Resources CFD/DFT (GXY)(GALXF): We first flagged this stock on the 8th of October for its short potential. As it was trading near its lows after a bearish breakdown, we wanted it to retrace towards the resistance zone before heading lower. Since it traded above the invalidation point, it made its way to the backburner.

Since then, prices have respected a bearish trendline and produced a pattern reminiscent to a triple top. Moreover, today’s price action has broken beneath key support and today’s high was capped by the 20-day eMA.

  • Bias remains bearish below 1.115, although traders can also use the bearish channel to confirm an invalidation point.
  • The triple top projects an initial target near the 0.875 lows.
  • There’s room to move to 0.815/30 but we’d expect profit taking / retracement around such levels.
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