Australian Equities Rally Through Significant Resistance

• ASX 200 smashing through major resistance.
• Rate hike seemingly off the table in August.
• Broad-based rally continues in Australia.

The ASX 200 broke much higher during the trading session on Wednesday, smashing through a major resistance barrier in the form of the AU$8100 level. It’s also worth noting that we have recently pulled back to the AU$7900 level, only to find support at the previous resistance level. This has formed a classic “breakout, pullback, and continuation pattern.” It’s easy to see that there was an ascending triangle being built in the ASX 200 over the last several months, and now momentum has been released to the upside.

Broad-Based Rally

The ASX 200 has seen strength across the board and then various sectors. One of the biggest factors would have been that traders are now starting to take the idea of an August rate hike coming from the Reserve Bank of Australia off the table, as this could allow for more risk appetite to come on to the markets.

BHP

BHP released a statement saying that iron ore supply had not been affected by a railcar incident during the session, and of course the idea that loose monetary policy could be seen in the future does tend to lift commodity markets and of course miners. The market had rallied 1.83% in a quick knee-jerk reaction to break back above the crucial AU$42 level, an area that has been important multiple times.

CSL

CSL Limited was very choppy during the trading session, but it is worth noting that the market is threatening the AU$312 level, an area that has been important multiple times in the past. It is currently forming a bit of a bullish flag, and despite the fact that it ended up negative by 14 basis points, the healthcare giant still look very strong, and it does make a certain amount of sense as traders reach down on the risk appetite spectrum, the perhaps CSL was somewhat ignored. Regardless, there is an obvious uptrend in this stock.

ANZ

Australia and New Zealand Banking Group had a very stout session, gaining 1.86%, and has even recaptured the 50-Day EMA, right along with the AU$29 level. The question at this point will be whether or not the market can continue to see the massive momentum that it has enjoyed over the last 48 hours. The AU$30 level above will be a barrier to overcome, but it is worth noting that ANZ has completed its acquisition of Suncorp Bank, extending its reach.

TLS

Telstra Group Limited continues its recovery, gaining 1.03% for the session, as it is now threatening the AU$4 level. It is firmly above the 200-Day EMA, and the 50-Day EMA is rising to suggest that we may sooner or later see a “cross” in this market. The telecommunications giant has seen a massive turnaround from the extraordinarily negative action that had been so ensconced in this market. Telstra now suggests that they could deliver to its cost target. Furthermore, several large analysts have now upgraded the stock, as they see it as being part 2 oversold, and potential growth as being a major factor. That being said, it is highly speculative still at this point, as it is down 7.51% so far for the year.

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