Aussie stocks have not enjoyed the same level of success as their global counterparts since the GFC. The XJO index, the ASX-200, has not reclaimed the highs it printed prior to the stock market collapse and is currently trying to defend the psychological 5,000 level. This compares poorly to the S&P500, DJIA, NASDAQ, DAX, FTSE and TSX, as just some global indices, that have all taken out their pre-GFC highs. The recent market pull back has some Aussie stocks setting up with desirable charting patterns though and offering some potential for when we eventually see any broad based recovery.
The larger S&P500 index is currently still showing signs of weakness, as the following charts reveal, and I would want to see a recovery here before being confident of any follow-through impact on Aussie stocks:
S&P500 monthly: Has passed its pre-GFC high BUT are we going to see a test of 1,600 before any bullish continuation?
S&P500 weekly: the bearish Death Cross is still open:
S&P500 weekly Cloud: the index is looking bearish whilst it remains below the weekly Cloud:
The XJO is currently trading in a number of triangle patterns pointing to some ongoing consolidation-style action. I’m seeing three different triangles on the daily, weekly and monthly charts but, at least, these offer trend lines to watch for any momentum-based breakout.
XJO monthly: in a monthly bullish ascending triangle and note the support trend line. Any bearish break and hold below the trend line would have me looking for potential support from the 50% fib near 4,500 and then the 61.8% fib near 4,200:
XJO weekly: note consolidation within the weekly triangle:
XJO daily: their is a smaller triangle on the daily that is set within the weekly triangle. Note the support from the psychological 5,000 level:
So, whilst we watch and wait for any breakout on the XJO there are a number of Aussie stocks worth keeping an eye on. One stock I want to start with is in the Consumer Goods Sector and is the vitamin & health care product company Blackmores (BLK) which has rallied this year, in part, due to growth in the Asian market region.
BKL weekly: a bit of a metric for the Asian market potential:
An Australian FTA with China is currently being negotiated and this may provide other Aussie companies a conduit to similar expansion and success. Thus, a focus on other Aussie stocks that stand to benefit form this FTA would be worth while.
On this topic of China and Asian markets, traders and investors who are interested in the Australian market should consider giving 30 minutes to listen to the first of the 2015 Boyer Lectures. In this series Dr Michael Fullilove examines Australia’s place in the world in light of the current challenges to the global order and the shift of wealth and power eastwards towards Asia.The theme of these lectures is ‘A Larger Australia’ and the first lecture can be found through this link.
Aussie stocks worth watching:
GEM weekly: in the Education space in Australia and Singapore and with trend lines and momentum to watch:
GOR weekly: A mining stock and so watch for any bullish breakout in Gold as this would help to support this stock. Keep an eye on the 0.50 cent level:
EVN weekly: ditto here and with trend lines also to watch:
HUB weekly: in the ‘Financial Services’ space BUT note the bullish TL break:
MFG weekly: also in the ‘Financial Services’ space but with a decent consolidation triangle worth watching:
MTU weekly: a telco with trend lines worth watching:
MNF weekly: another telco with appealing trend lines to watch:
MTR weekly: in the ‘Services’ sector for accommodation and likely to benefit from increased (growing Asian middle class?) tourism:
RMD weekly: in the Health Care sector and may benefit from the ageing population. Has pulled back nicely and has trend lines worth watching here too:
SHL weekly: another Healthcare company with trend lines worth watching:
NUF weekly: in the ‘Materials’ space but agri-business related. Perhaps to benefit from any Aussie ‘Mining to Dining’ boom?
RHC weekly: another Healthcare stock and it looks to be in a Bull Flag:
Some stocks I’m wary of:
WOW monthly: Woolworths is suffering from competition from the likes of Aldi and Costco and they aren’t going to go away. Previously a no-brainer ‘winner’ but any monthly break and hold below $23 might spell further bearish potential here:
WOW monthly: watch $23
WOW weekly: getting down to either break and bust OR bounce territory:
TLS Telstra: note how this stock has respected the monthly 61.8% fib region! The break of trend line is worrying here and I’m looking for a test of $5 near the 50% fib or even $4 near the 61.8% fib:
BHP monthly: the break of the triangle trend line is concerning here so watch for any test of lower support near the 61.8% fib and $20 region:
CBA weekly: Which bank is testing major monthly support? The Commonwealth Bank! Watch for any break and hold below the trend line and $70 region to offer a potential move down to $60 and 50% fib support or even to $50 and 61.8% fib support. Sounds incredible but….. watch and see!