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The World, ASX, and BHP

Vantage Updated Fri, June 14 04:36
  • BHP is approaching a major support level. 
  • Central banks attempt to stimulate the economy in various countries. 
  • Foreign stock indices continue to point higher. 

The ASX 200 fell slightly during trading on Thursday, but it finds itself testing the 50-Day EMA. As the market continues to grind slightly higher, traders can observe a potential triangle that is setting up for a slight squeeze higher. Recently, the AU$7900 level has been a significant resistance barrier, but it is worth noting that each successive swing low continues to be higher than the one before it. 

Chart of ASX200 taken from TradingView on 14 June 2024 

The 200-Day EMA currently sits just above the AU$7500 level and is moving in a gentle slope higher. This suggests that the momentum is still on the buying side, despite the fact that it has been very choppy over the last couple of months. It is also worth noting that the ASX 200 may have to play catch-up to other indices around the world, as they all do tend to move in the same overall direction. 

United States, Europe, and others. 

When looking around the world, it is easy to see that most indices are rising over time. The S&P 500 rallied significantly after the FOMC meeting, as it appears that traders in the United States believe that the Federal Reserve may cut rates sometime later this year. With that being the case, it should lead to an explosion in economic activity, which could have a knock on effect in Australia, due to increased demand for “hard commodities”, such as copper, iron, etc. 

Chart of S&P 500 taken from TradingView on 14 June 2024 

In Germany, the DAX did pull back a bit during the trading session on Thursday, but it is sitting right on the 50-Day EMA and of course has been very bullish for months. The overall trend is very much intact, and although the momentum has slowed in the last couple of weeks, when looked at through the prism of longer-term trading, it’s easy to see that Germany is still increasing in momentum, which also could add to more demand on hard commodities. 

Chart of DAX taken from TradingView on 14 June 2024 

In Hong Kong, the market appears to have stabilized near the 50-Day EMA, after a significant pullback. However, it’s also worth noting that the HK 50 had shot straight up in the air previously, so the sharp pullback would have been expected. The question now is whether or not it can rally from here, showing strength in Asia? 

Chart of HK50 taken from TradingView on 14 June 2024 


One of the biggest companies in the materials sector, BHP, looks as if it is getting close to a major support level in the form of AU$42. This would be one of the major players when it comes to the materials sector in Australia and could also end up being a bit of a value play as it has been a laggard to some of his contemporaries, mainly due to a failed attempt to purchase a competitor. 

However, it is worth noting that many foreign investors look at BHP, Rio Tinto, and others as a block of trading assets, especially through the advent of ETFs worldwide. With this being the case, one would have to be very interested in the AU$42 level for BHP, as it could be a major point of inflection, especially if commodity demand starts to pick up. 

Chart of BHP taken from TradingView on 14 June 2024 

The alternate scenario of course is that global growth grinds to a halt, and if that is the case BHP could take it on the chin. After all, less demand for hard commodities could be toxic for their business. As things stand right now, it does look like central banks around the world are willing to step in and support the economy. We have already seen interest rate cuts at the European Central Bank, the Swiss National Bank, and the Norges Bank in Norway. 

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.