Trade Charting

Duck is not often a term used to signify achievement; think ‘lame duck’ or even ‘ugly duckling’ but Duck is the analogy I would use at the moment to describe, with some excitement and anticipation I might add, how I’m seeing the Aussie stock market.

Why a Duck? To answer this question I ask you to refer to the image below. Ducks are often noted for the calm presentation on top of the water whilst there is an acknowledgement that they are busy paddling away underneath. That is how I currently view the ASX-200 as 2017 looms to a close and the index tries to carve out a monthly and yearly candle above the key 6,000 level.

It is well known that many of the the US stock indices, S&P500, DJIA and NASDAQ as just three, have closed above their pre-GFC Highs. The ASX-200, though, is yet to achieve this milestone:

S&P500 monthly: trading well above the pre-GFC high of 1,600:

DJIA monthly: trading well above the pre-GFC high of 14,000:

NASDAQ monthly: trading well above the pre-Dot-Com and GFC high of 5,200:

ASX-200 monthly: However, the ASX-2000 is yet to close above the pre-GFC high of 6,800. Note the recent bullish signals here though with the recent break of a 10-year bear trend line and a Cup ‘n’ Handle breakout. The latter is best viewed on the weekly chart.

Any break and hold above 6,800 would have me looking for a possible move up to 10,400 in an Ascending Triangle breakout; like those already seen on the S&P500, DJI and NASDAQ to name just a few:

ASX-200 weekly: note the bullish Cup ‘n’ Handle breakout. This pattern has a target for its move up to 6,800 and this happens to be the pre-GFC High. Confluence!

A December monthly for the ASX-200 above 6,000 would be a very encouraging achievement and might underpin some catch-up activity to its USA counterparts. If so, this would be the first close above 6,000 since Dec 2007 and the first bullish candle close since Oct 2007; a period of 10 years! Thus, whilst the index appears to have been doing very little, like the calm Duck, it is clearly scampering to carve out a close above this key 6,000. The month does not close for another nine days but the 6,000 level is the one I’m closely watching on the ASX-200 and hoping that the Ugly Duckling ASX-200 may evolve into something of great beauty for 2018!