ASX200 pops to new cycle highs
In an article two days before year-end, it was noted for the first time in almost a decade, the ASX200 was set to finish the year without a “Christmas rally”. An unusual end to an extremely unusual year.
Share this:
While it could be argued that the ASX200’s 10% rally in November was an early Christmas present/rally, it merely enabled the ASX200 to finish the year near to where it started. A relief to those who sat tight during a 40% plunge during the first quarter. But lacking in comparison to the recovery in other global equity markets.
The start of 2021 has started on a brighter note. The Sydney COVID-19 clusters that emerged before Christmas have been bought under control. The Democrat's win in the Georgia Senate runoff bought with it a promise of even more stimulus as well as a plan to enact a massive wave of infrastructure spending, possibly in the order of $2-$3trillion.
Reinforcing the idea that the incoming Biden administration is prepared to splash the cash, testimony overnight from nominee Treasury Secretary Janet Yellen. Yellen urged lawmakers to “act big” on their next relief package and that the benefits of this would far outweigh the negatives associated with a higher debt burden.
A combination of factors, expected to provide continued support for equities, helping the local bourse, the ASX200 pop above the top of a 6-week range earlier today.
From a technical perspective, the break above 6765, if confirmed on a closing basis would open the way for the ASX200 to push towards the next upside target coming in at 6900/7000. Above here, the next upside target is the pre-COVID-19 high of 7197.
After trimming an overweight long position at the end of last year, a core long position in the ASX200 was retained, which we are determined to stay with. Dips back into a band of support 6600/6500 will be looked at closely as a buying opportunity to add to core longs.
Learn more about trading indices
Source Tradingview. The figures stated areas of the 20th of January 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
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
S&P 500, Nasdaq, Dow Forecast: Rising Yields Test Rally Ahead of Nvidia, Fed 8 22 2026
S&P 500, Nasdaq and Dow test key technical levels as momentum fades, raising the risk of a deeper correction heading into a pivotal week.
ASX 200 Futures Reversal Patterns Put to the Test
Not all reversal patterns are created equal. Historical ASX 200 futures data shows which signals have been more reliable, and why risk management still matters.
Cyclical stocks sniff out better times ahead
Different economies, different drivers, similar price action. The German DAX, ASX 200 and Russell 2000 are all hinting at a more optimistic view on the global economy.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.