A big week for the ASX200 is underway
The volatility episode of January extended last week, on mixed earnings reports and as the European Central Bank and the Bank of England completed a trifecta of G3 central banks to make a hawkish shift.
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Locally the Australian stock market, the ASX200, closed 1.89% higher last week at 7120, benefitting from a positive lead from Wall Street and after the RBA maintained its dovish forward guidance. All sectors closed in positive territory with the Energy and Utilities sector leading gains, both up over 4%.
This week the Australian 1H2022 earnings season picks up a gear with reports due from companies including the Commonwealth Bank of Australia (CBA), Computershare (CPU), AGL Energy (AGL), and ASX Limited (ASX).
As noted in our preview of earnings season here, the Delta and Omicron outbreaks bring earnings risk for companies with a domestic focus and may see the volatility episode of January extend further into February.
Data-wise, the main highlights will be Business and Consumer sentiment surveys. In December, the NAB Business Confidence index fell to -12, its lowest level since July 2020, reflecting the arrival of Omicron.
A modest bounce is expected when Business Confidence data is released tomorrow, although the continued impact of Omicron should see the number remain at depressed levels. Omicron and the talk of higher interest rates will test the resilience of consumers when Westpac Consumer Confidence data is released on Wednesday.
ASX200 Daily Chart
While the ASX200 remains below resistance at 7200, the recovery from the 6758 low is viewed as a correction (Wave iv), and there remains the possibility of another leg lower, including a retest of the 6758 low(Wave v).
Aware that a daily close above 7200 would neutralize downside risks and indicate a more robust recovery is underway towards the 7632 high.
Source Tradingview. The figures stated areas of February 7th, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
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Locally the Australian stock market, the ASX200, closed 1.89% higher last week at 7120, benefitting from a positive lead from Wall Street and after the RBA maintained its dovish forward guidance. All sectors closed in positive territory with the Energy and Utilities sector leading gains, both up over 4%.
This week the Australian 1H2022 earnings season picks up a gear with reports due from companies including the Commonwealth Bank of Australia (CBA), Computershare (CPU), AGL Energy (AGL), and ASX Limited (ASX).
As noted in our preview of earnings season here, the Delta and Omicron outbreaks bring earnings risk for companies with a domestic focus and may see the volatility episode of January extend further into February.
Data-wise, the main highlights will be Business and Consumer sentiment surveys. In December, the NAB Business Confidence index fell to -12, its lowest level since July 2020, reflecting the arrival of Omicron.
A modest bounce is expected when Business Confidence data is released tomorrow, although the continued impact of Omicron should see the number remain at depressed levels. Omicron and the talk of higher interest rates will test the resilience of consumers when Westpac Consumer Confidence data is released on Wednesday.
ASX200 Daily Chart
While the ASX200 remains below resistance at 7200, the recovery from the 6758 low is viewed as a correction (Wave iv), and there remains the possibility of another leg lower, including a retest of the 6758 low(Wave v).
Aware that a daily close above 7200 would neutralize downside risks and indicate a more robust recovery is underway towards the 7632 high.
Source Tradingview. The figures stated areas of February 7th, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
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- Choose your position and size, and your stop and limit levels.
- Place the trade.
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