ASX 200 Breaks Through Resistance

● Australia kicks off the week to the upside.

● Mixed results under the hood of ASX 200.

● Major holiday in the United States. (Martin Luther King Jr. Day)

During the Monday trading session, the ASX 200 broke above a short-term resistance barrier, showing more strength on Monday than we have had over the last couple of days. What’s interesting is that equity markets around the world continue to rally, and it seems as if Australia got the ball rolling. However, it’s also worth noting that the underlying stocks of the index were not all created equal.

ANZ Group Holdings Limited (ANZ)

ANZ Group Holdings experienced a relatively quiet trading session on Monday, but the key takeaway is that the market continues to hold above the 200-day EMA. The indicator of course is something that a lot of technical traders will be paying close attention to. However, it’s important to note that the market is currently in a previously volatile area, suggesting strong support remains. The AU$30 level above is going to be crucial to see whether or not the market can truly break out to the upside and continue higher.

Woolworths Group Limited (WOW)

Woolworths Group Limited was positive during the trading session on Monday, breaking higher from the crucial AU$30 level, and gaining 80c. The market still sees a certain amount of technical resistance above, but it is worth noting that WOW has been in a bit of a “basing pattern” for some time, which ultimately should attract a certain amount of technical trading, especially if the volume starts to pick up. Going forward, if the market were to break above AU$31, then a certain amount of “FOMO trading” could emerge. Below, it looks as if the AU$29 level is still an area where there seems to be a lot of demand.

Aristocrat Leisure Limited (ALL)

Aristocrat Leisure Limited was down 0.08% in the trading session on Monday, as the market continues to see a lot of sideways action. It does seem as if there is structural support near the AU$70 level, and it is important to understand that ALL has been in a significant uptrend for quite some time. If the market were to break down from here, there also seems to be a good amount of support extending all the way down to AU$66. On the upside, if the market could clear the AU$73 level, this will almost certainly kick off further buying. It is worth noting that just a few days ago, Aristocrat Leisure bought back 167,443 shares.

RIO Tinto Limited (RIO)

RIO Tinto had a gap to kick off the trading week, settling on a 1.14% gain for the session on Monday, as the market leapt above the 200 Day EMA. The AU$122 level above has offered a little bit of resistance multiple times, but now it looks like we will eventually continue to see more of a “buy on the dip” type of scenario. Rio Tinto will release its quarterly earnings on 29 January, so between now and then there might be a bit of sideways action.

Disclaimer: The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our client. No representation or warranty is given as to the accuracy or completeness of this information and therefore it shouldn’t be relied upon as such. Any research provided does not have regard to specific financial situations, needs or investment objectives. Vantage accepts no responsibility for any use that may be made of these comments and for any consequences that result. Consequently, any person acting on it does so entirely at their own risk. We advise any readers of this material to seek professional advice where necessary. Without the approval of Vantage, reproduction or redistribution of this information isn’t permitted.