ASX 200 Morning Market Outlook: Sectors Support Fresh Breakout
ASX 200 breaks above 9,000 with sector momentum pointing to further gains as materials, industrials, and financials lead the rally.
Share this:
The ASX 200 surged through the 9,000 level on Wednesday, its best performance in over eight weeks. Price action across major sectors suggests the breakout could have more room to run, with materials, industrials, and financials leading momentum while energy and real estate show signs of recovery.
View related analysis:
View related analysis:
ASX 200 Outlook: Sector Strength Reinforces Breakout
ASX 200 Market Snapshot
- Wednesday’s bullish breakout and 1.1% gain was the best performance for the ASX 200 in over eight weeks
- Up 2.3% from Friday’s close, the ASX 200 is on track for its best week in eight or its most volatile week in four
- 146 (76%) stocks advanced to show breadth behind the rally, 42 (21%) declined, 12 (6%) were unchanged
- Healthcare, materials and financials led the 8 sectors higher, while the 3 sectors that declined only saw marginal losses
- Despite the strong breakout, the ASX has clearly lagged behind the DAX and Nikkei over the past 60 days
Chart analysis by Matt Simpson - data source: ASX, LSEG
ASX 200 Sector Analysis
The ASX 200 materials sector leads the index higher with an 18% rally year-to-date, now back above 19,000 and trending towards record highs.
The industrials sector has rebounded from last week’s low, suggesting its correction from the August peak may be complete, with potential for a move above 8,800.
The ASX 200 financials sector remains closely correlated with the broader index. Its latest rebound signals a cycle low could be in place, with momentum building towards a new high.
The real estate sector has formed a higher low above 4,000, with momentum shifting higher alongside the broader market, hinting that its corrective phase has ended.
The energy sector is showing signs of a potential double bottom, pointing to at least a short-term bounce if not a broader recovery in line with the ASX 200.
Meanwhile, the consumer discretionary sector has seen only a shallow retracement, which suggests the uptrend may soon resume.
Chart analysis by Matt Simpson - data source: ASX, LSEG
ASX 200 Technical Analysis
Thursday’s bullish breakout was constructive, though it is less than ideal that it occurred on below-average volume. And while the ASX 200 tagged the 9,000 target, prices appear hesitant to push higher for now. Also note that the daily RSI (2) reached heavily overbought territory on the breakout day, warning of a possible near-term pause. That said, the RSI (14) is not overbought and is confirming the rally, so my bias remains for an eventual retest and break to new highs.
Bulls could seek dips towards the 8,900 area in anticipation of a move back to the all-time high (ATH). Note the 8,793–8,979 resistance zone nearby, which is comprised of the cash market and overnight VPOCs (volume point of controls). The upper 1-standard deviation band for the 1-week VWAP is also near the September high (8,939) for potential support, while Wednesday’s overnight VPOC and weekly VWAP sit around 8,899–8,909.
Chart analysis by Matt Simpson - Source: TradingView, ASX SPI 200 Index Futures
View the full economic calendar
View the full economic calendar
-- Written by Matt Simpson
Follow Matt on Twitter @cLeverEdge
How to trade with City Index
You can trade with City Index by following these four easy steps:
- Open an account, or log in if you’re already a customer
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
- Search for the market you want to trade in our award-winning platform
- Choose your position and size, and your stop and limit levels
- Place the trade
Related tags:
Latest market news
Open an account in minutes
Experience award-winning platforms with fast and secure execution.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
S&P 500, Nasdaq 100 Claw Back But NVDA Cloud Looms Overhead
Last week was green for both the Nasdaq and S&P 500 but given the sell-off that led into that bounce there’s still a very real question as to whether bears still have a statement to make. And the NVDA situation presents a very real threat.
Gold, EUR/USD hit 2026 lows as US yields erupt
US Treasury yields have staged one of their largest four-session increases in decades, hammering EUR/USD and gold. But while the euro's decline makes sense, gold's reaction has been extraordinary.
Nasdaq 100 forecast: Nvidia troubles put AI recovery into question
The recovery for major indices this week has helped repair much of the technical damage inflicted by last week’s sell-off, but the latest developments with Nvidia suggest investors are not quite ready to put the underlying risks behind them. The Nasdaq 100 led other US index futures lower overnight, with falls of around 0.8%.
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.