It sure has been a bumpy past few weeks in financial markets with a plethora of geopolitical and macro events rattling the market’s cage.
Amongst all the volatility however, the XJO is on track to close out the week with a gain of nearly 2.90% which is a great result all things considered.
From a technical standpoint, the market is sitting at a resistance level of around 7270 and a will need to break to the upside from here for our stance to turn from neutral to bullish. Question is, what will the catalyst be for a move higher?
On Wednesday, the Fed Reserve raised interest rates for the first time in a number of years which markets were expecting, but interestingly this led to a broad-based rally in the US across all major indices, especially the beaten-up tech sector. We are watching this space closely as some stocks in this area are trading at 50% - 80% discounts to this time last year, and opportunities are starting to emerge. The markets’ reaction off the back of the interest rate rise is encouraging and may prove to be the start of a recovery.
We believe now is the time to be an active investor and to be selective with what stocks you add going forward. Having a solid trading plan in place especially for scalping or short-term trading can improve results and reduce losses, so traders are encouraged to stick to their trading rules and strategies
S&P/ASX 200 (XJO.ASX)
1. Short-term resistance in place around recent high of 7270
2. Recent low and support around 6800
3. Recent high around 7620
Bank of Queensland (ASX.BOQ) is one Australia’s largest regional banks and has had a very strong past 2 weeks of trade rallying 12% in this time. It is trading in a range between $7.50 and $8.40 and it at the top end of that range which is a proven point of resistance.
A break higher from here could see the stock retest recent highs of about $9.70 which we’d expect to occur over a 2 – 4-week period. If this resistance level holds for now, the stock looks likely to retest recent lows/support at the bottom of the range at about $7.50 at which point we would be looking for an entry signal and move back up to the top end of the range.
Bank of Queensland (ASX.BOQ)
1. Triple bottom support holding - stock now range bound
2. Triple top resistance forming - stock needs to break higher to warrant any interest
Zip Co (Z1P.ASX) the once upon a time market darling has been crucified over the past 12 months falling from $15 down to $1.68. Many investors have been burnt by this stock, but we believe it’s approaching an interesting level technically and can see a rally back to $2.50 in the coming days/weeks.
The stock is sitting on strong support and lows not seen since the peak of the pandemic back in March 2020, and although the fundamental picture has changed somewhat during this time, as technical traders we’re more focused on what the charts are telling us.
A break lower from here would alter this view significantly, but we see favorable risk reward and are taking a bullish stance in the short term.
Zip Co (Z1P.ASX)
1. Recent low and support at $1.60
2. Short term price target of $2.50
3. Strong downtrend that needs to be broken to confirm bullish outlook
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