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ASX: XSO; Small Ords Index.

July 12, 2019

The ASX-200 Index is trading right up under the previous all time High that was set back prior to the 2007-2009 Global Financial Crisis (GFC). As such, this index might stutter a bit as it navigates this major psychological region and, as a result, so too might ASX-200 stocks. I’m wondering if the Small Ords index might be setting up with more trading potential and my thinking is explained below.

 

XJO: The ASX-200 Index:

XJO: ASX-200 weekly: the XJO Index, the ASX-200 is trading up near the previous all time High, just under the whole number 6,850 level, that was set back in 2007. The index, and its components, might struggle a bit though as price action navigates this major psychological barrier:

 

XJO: ASX-200 daily: the XJO has done well throughout 2019, note the higher Highs and higher Lows, but it might struggle a bit from here at this major 6,950 barrier. However, as with any break of a long term support trend line, if there is a break to the downside, watch out that price action doesn’t just shape up into a consolidation-style Bull Flag before the next move higher.

 

XSO: The ASX Small Ordinaries Index: 

The XSO is an index of those stocks in the ASX-300 but not in the ASX-100. That is, it is the list of the next 200 top ASX stocks after the ASX top 100. A list of XSO Small Ords stocks can be found through this link.

 

XSO: ASX-Small Ords weekly:  The XSO Index is nowhere near its 2007 pre-GFC High of circa 4,200. Price action is currently trading under the whole number 3,000 level making this the one to watch for any new make or break.

It is the fact that this index has so much more room to move to reach its previous High that appeals to me. If there is to be continued stock strength in the USA then this might help drag ASX stocks along too. I know this is a big IF but, if so, there might be better trading opportunity across stocks making up the XSO index than the ASX-200. Just something to think about. I have been scanning the XSO index and a few new names have come up so I’ll post about them next week.

 

XSO: ASX-Small Ords daily: the XSO is printing higher Highs and higher Lows for now as well. Watch for any new make or break at 3,000 BUT, if there is a break to the downside, watch out that this doesn’t just shape up into a consolidation style Bull Flag before the next move higher.