ASX 200 Tests Support on Wednesday

• ASX 200 testing a major area again.
• Quantas could be looking for a breakout.
• Healthcare performance strong on Wednesday.
• New York continues to influence Australia.

During the Wednesday session, we saw the ASX 200 plunged toward the 50-Day EMA, showing signs of negativity yet again. However, there is the crucial AU$7900 level underneath, which also has been an area of intense struggle. This is mainly because we have seen both support and resistance in this region, leading to what most traders will refer to as “market memory”, a phenomenon where the market will react time and time again in that region. Ultimately, it’s what “support and resistance” is built upon, so technically speaking, this is a market that at present time is in a major inflection point.

American Influence

It’s worth noting that the influence of the American stock market cannot be discounted very easily, as that is typically the first place, Australians get there idea of trading from. Ultimately, this is a market that I think continues to see a lot of external pressures due to not only equities trading in New York, but also concerns about global growth. After all, Australia is considered to be the gateway to Asia by a lot of large firms, and as long as there are concerns about Asian growth, this will put a bit of a damper on the idea of the ASX 200 shooting straight up in the air.

That being said, it is worth noting that the indices in the United States are at least trying to stabilize during the session on Wednesday, so if that can continue, it could bode well for the ASX 200, as well as other regional indices such as the Nikkei 225.

Transurban Group (TCL)

Transurban Group was a bit of an outlier during the trading session, as it managed to close positive. That being said, gained just 15 basis points, closing at the AU$13.63 level, and it must be pointed out that the market initially gapped to the AU$13.87 level and then simply fell from there. That being said, it does look as if it is in the midst of trying to break out to the upside.

Fisher & Paykel Healthcare Corporation (FPH)

Fisher & Paykel rally during the Wednesday session, but this makes perfect sense as it is a healthcare corporation, and traders may have used it as a proxy for safety. Gaining just under one half of a percent, it was one of the big winners of the day, suggesting that perhaps there is a lot of concern out there by Australian equities traders, and at this juncture they could be looking for dividend payers and “safety stocks.”

Quantas Airways (QAN)

Quantas Airways minister rally as well, as the airline gained 59 basis points for the trading session. Qantas does look a little overstretched from a technical analysis standpoint, as the Relative Strength Indicator is in the overbought territory. However, most traders are focusing on the fact that the stock is currently testing a major resistance barrier going back to spring of 2023, and if it can pick up momentum, it’s very likely that there will be a certain amount of “FOMO trading” trying to catch up to the momentum.

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