Whipsaw micro-adjustments have characterised the Australian Securities Exchange in recent weeks. A dramatic improvement occurred heading into 2024, followed by reversals (profit-taking) and gradual improvements. The ASX has consolidated in a tight trading range between 7,600 and 7,700.
Interesting inferences can be drawn from the current performance of the Australian Stock Market Index in recent weeks. The current level of 7,644.80 is significantly higher than the 50-day moving average of 7,433.36 and the 200-day moving average of 7,224.13. This indicates bullish momentum driving stock trading journal.
Interesting inferences can be drawn from the current performance of the Australian Stock Market Index in recent weeks. The current level of 7,644.80 is significantly higher than the 50-day moving average of 7,433.36 and the 200-day moving average of 7,224.13. This indicates bullish momentum driving stock trading.
The Bollinger Bands reflect as much, with the centre band at 7,546.10, the upper band at 7,735.37, and the lower band at 7,356.83. These indicate that a retracement towards the centre is on the cards. That should coincide with a movement from 7,644.80 towards 7,546.10, all things being equal. This trend with Bollinger bands can be extrapolated. We see that the Australian securities market is currently overbought, and a sell-off is possible towards the centre. If the underlying securities reach a level below the centre or lower bands, an upward revision will ensue. This is referred to as balance. These corrections are standard in trading practices.
Capitalizing on Market Volatility
The peaks and troughs in the trading cycle represent market volatility. Micro-movements are pronounced and often not reflected in the long-term charts. Traders focus on short-term price movements in several ways. Foremost among them, with traders down under, is CFD trading. Many retail and institutional traders prefer contrarian financial products such as contracts for difference. These derivatives instruments can be traded on the world’s premier trading platforms like MetaTrader 4, and no ownership of the underlying instruments is required.
Trading with MetaTrader 4 offers a feature-filled selection of options, designed to bolster trading activity with technical indicators, multiple timeframes and chart views. MT4 is readily available to registered clients of reputable brokers on PC, Mac and mobile devices. A comprehensive selection of powerful tools, resources, and features enables traders to access charts across many time frames. MetaTrader 4 works whether you are a UK trader interested in stocks, commodities, indices, or currencies in the Australian market, or vice versa.
With dozens of technical indicators, it’s possible to gain detailed insights into the functionality of the financial markets, forecasting likely price movements with a greater degree of accuracy. While no platform or system guarantees results, MetaTrader 4 provides all the resources required to assess, scrutinise, and make informed decisions regarding trading activity. Automated trading strategies, otherwise known as algorithmic trading, are built into the framework of MT4. Hedging and scalping are permitted for added benefit.
Factors Driving the ASX
The local bourse is being lifted by IT stocks, particularly TechnologyOne, JB Hi-Fi, and Medicus. As a sector, IT companies are the perfect counterbalance to healthcare and mining stock declines. Like many other global markets, the Australian Stock Exchange is impacted by the decisions of the Federal Reserve Bank. Naturally, inflation-related measures and interest rates weigh heavily on the performance of stock markets. If the Fed decides to cut rates, this will renew interest in credit expansion, driving up demand and putting pressure on supply channels.
The Australian dollar/US dollar has been trading at subdued levels recently, dropping from 0.690 to its current level of 0.65273. This is rapidly falling to the lowest level in over three months. The RBA (Reserve Bank of Australia) Governor walked back expectations of an inflation rate reduction towards 2.5%. The RBA may move to boost interest rates to cut inflationary pressures. A rate hike is the standard tool for combating inflation, but analysts are expecting the RBA to move in the opposite direction in 2024 and 2025.
Meanwhile, the Australian unemployment rate remains at 3.9%, unchanged from the high in November. The number of employed persons in Australia has declined, and the LFPR (Labour Force Participation Rate) snapped back to 66.8% in December from 67.3% in November 2023. These figures, while high over the short term, are markedly less than Australia’s highest unemployment rate of 11.20% decades ago. Australia’s unemployment rate is on par with that of the United Kingdom albeit somewhat higher than the United States and the Netherlands. The countries with the lowest unemployment rate include Singapore (2%), Japan (2.4%), and Switzerland (2.5%).
Traders can use a variety of tools and indicators to gauge the state of the financial markets, particularly over the short term. With CFD options, hedging against adverse movements in traditional traders is possible. In all cases, caution is advised since derivative markets are inherently volatile and losses can result.
