- The Australian index has rallied rather significantly during the trading session here on Wednesday, gaining almost 2%, and at one point, actually did gain over 2%.
- We are well above the crucial $7,900 Australian level and now are above even the $8,000 Australian level quite handily.
This shows that there is follow through in Australia, and I do think that buyers will continue to step in and pick up cheap equities. Remember that the ASX 200 is driven by a lot of different things, but commodities and financials are two of the bigger ones. What I have noticed over the last couple of weeks, as we have seen quite a bit of broadening of the rally, and that of course is very healthy.
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We Have Moved Beyond Commodities
After all, we're not trading just on the price of copper, for example, or gold. You know, we are moving beyond miners and now we are talking about things like consumer discretionary and then, of course, financials such as the Commonwealth Bank of Australia, which has been a big performer because of this.
I like the idea of buying dips and I do believe the 7900 level underneath is going to end up being a massive support level, especially as the 50 day EMA is coming into the picture. I like this as a scenario where it is body only and when we do fall, it looks very much like a valuable opportunity that we can take advantage of. We consolidated for several months and now we are breaking out to continue the longer term uptrend.
Because of this I think you need to look at the Australian Stock Exchange house a place to diversify some of your portfolio. I don't really have a target yet, mainly due to the fact that we have seen so much in the way of momentum, and I think it is probably only a matter of time before we truly take off to the upside. I have no interest in selling this market, it is far too strong at this juncture.
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