- In Australia, we've seen equities rally during the session on Wednesday to reach the 8,350 level before pulling back.
- There are a few caveats that I would point out though. The first one being that a lot of people are going to be paying close attention to the FOMC meeting later in the day.
- The second one being that a large disproportionate portion of gains during the day were actually healthcare stocks, which isn't exactly what you want to see.
So, with that, I do think there's a little bit of an underlying doubt in the ASX 200 at the moment, but from a technical analysis standpoint, we have a couple of clear levels that we need to be paying attention to. The first is the 8,350 level. It's the area that we touched and pulled back from and confirmed as resistance. It does make a certain amount of sense that the resistance occurred there because it was previous support.
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If we were to break above there, then I do believe that the ASX 200 will probably go looking toward the 8500 level. On the other hand, if we were to drop from here, the 8200 level, I believe, becomes very important because it's been important in the past, but it is also just below a short term trend line from September to now. The question is whether or not that trend line can hold and whether or not buyers will continue to jump into the ASX 200. It's probably worth noting that we're still very much in an uptrend and we are hanging around the 50 day EMA, as well as the fact that we did close positive for the session. So, despite the fact that we gave back some of the initial gains, there is that.
Furthermore, the previous session was very bullish. So, I'm more inclined to think that eventually we break higher, but I don't like the idea of being heavily exposed to Asia, which if you're heavily exposed to Australia is the same thing. Australia is a major exporter into China. So, they need Chinese growth, which is something that looks somewhat like luster at the moment.
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