Both All Ords and ASX200 have achieved 12% appreciation over the past month, led by mining, materials and Industrials as commodity prices rebounded on Q1. You can see the bullishness across the board for the ASX but we have now reached the 5400 milestone and prices have paused.
Oversees US and Asia Indices seem poised to go higher on the near-term as outlined in yesterday's video whilst the European counter-parts drag their heels. However, the Australian market is more likely to take its' lead from the US, to suggest prices could remain supported in the event of a pullback.
AUS200 has paused at the 5400 barrier which also coincides with the upper bullish channel. There is a very mild bearish divergence on D1 and H4 which is subtle enough to ignore in my books. Besides, more often than not a divergence merely signals the potential for a pullback (at best) as divergences need to appear across multiple timeframes before being taken more seriously as a reversal signal.
Also there is a bullish channel apparent on the RSI which leaves wriggle room for further appreciation, so I view any pullback from current levels an opportunity to position yourself long at, or around a support level.
Not only is 5400 a nice round number but there is a strong confluence of resistance involving a 50% retracement, monthly S1 and Fibonacci expansions (61.8% and 161.8%). These forces combined suggest a break above may be short lived but we also have 5,000 close by and a strong confluence of resistance between 5522-5560. This makes long positions at current levels undesirable from a reward to risk perspective, so would prefer to sit out until we get pullback (if one comes at all).
AUS200 pauses at 5400 (for now)
Whilst prices have paused at the 5400 level, AUS200 remains in my buy-the-dip list as technicals favour an eventual upside break.