The optimistic tone has continued in today's session following news China is considering easing rules to allow distressed real estate developers to sell off assets to avoid default. And
Chinese economic data released today showed that the Chinese economy has weather the regulatory and Evergrande debt storm better than expected.
Expectations are also firming ahead of a virtual meeting between President Xi and President Biden scheduled for 11.45 am Sydney time tomorrow. The discussions may lead to a rollback on some tariffs in return for Chinese commitments over intellectual property issues and other areas of tension, including steel, aluminium, and solar panels.
All of which may overshadow the release tomorrow of the Meeting Minutes for the RBA's November Board meeting and a speech by RBA Governor Lowe tomorrow afternoon. Both are expected to be dovish and indicate that interest rate hikes are unlikely until 2024 or late 2023 at the earliest.
We refresh the following trade idea to take advantage of a still dovish RBA, better sentiment out of China, and evidence that the ASX200 completed an irregular abc type correction at last weeks 7329.5 low.
Should the ASX200 (cash index) break above the band of horizontal resistance coming from recent highs 7477/87, we favour opening longs on a stop entry at 7495 (cash index), looking for a retest of the August 7632 high.
The stop loss would initially be placed at 7422 and trailed higher to 7460 if the ASX200 trades 7550ish.
Source Tradingview. The figures stated areas of November 15, 2021. 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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